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| BP announces up to 3,000 new job cuts | BP announces up to 3,000 new job cuts |
| (about 2 hours later) | |
| Oil giant BP has announced up to 3,000 new job cuts after revealing that its annual underlying profits have more than halved. | Oil giant BP has announced up to 3,000 new job cuts after revealing that its annual underlying profits have more than halved. |
| BP said its profits had fallen by 51% to $5.9bn (£4.1bn), compared with $12.1bn in 2014. | BP said its profits had fallen by 51% to $5.9bn (£4.1bn), compared with $12.1bn in 2014. |
| Underlying fourth-quarter profits fell to $196m, compared with $2.2bn for the same period in the previous year. | Underlying fourth-quarter profits fell to $196m, compared with $2.2bn for the same period in the previous year. |
| The oil giant was the biggest faller on the FTSE 100 index, tumbling 8.6% by lunchtime. | |
| Last year, it said 4,000 jobs would go in its upstream division as part of a $2.5bn restructuring programme. | Last year, it said 4,000 jobs would go in its upstream division as part of a $2.5bn restructuring programme. |
| BP said its upstream business, which covers exploration and production, slumped to a $728m loss in the final quarter. | BP said its upstream business, which covers exploration and production, slumped to a $728m loss in the final quarter. |
| The latest reduction of up to 3,000 jobs by the end of 2017 affects staff and contractors in its downstream segment. | The latest reduction of up to 3,000 jobs by the end of 2017 affects staff and contractors in its downstream segment. |
| This refers to its refined oil products, such as fuel, lubricants and petrochemicals, for making products such as paint and plastic bottles. | This refers to its refined oil products, such as fuel, lubricants and petrochemicals, for making products such as paint and plastic bottles. |
| Progress hailed | Progress hailed |
| Bob Dudley, BP's group chief executive, said the company was making good progress in managing and lowering costs and capital spending. | Bob Dudley, BP's group chief executive, said the company was making good progress in managing and lowering costs and capital spending. |
| "We are continuing to move rapidly to adapt and rebalance BP for the changing environment," he added. | "We are continuing to move rapidly to adapt and rebalance BP for the changing environment," he added. |
| Oil prices have been hit by the slowing global economy, the strong US dollar and oversupply. | Oil prices have been hit by the slowing global economy, the strong US dollar and oversupply. |
| BP's dividend will remain unchanged at 10 cents per ordinary share for the quarter. | BP's dividend will remain unchanged at 10 cents per ordinary share for the quarter. |
| Sanjiv Shah, chief investment officer at Sun Global Investments, said: "The short term looks difficult but shareholders should be encouraged by the fact that a pick-up in prices is expected soon and that BP management are committed to continue paying out current dividend levels." | Sanjiv Shah, chief investment officer at Sun Global Investments, said: "The short term looks difficult but shareholders should be encouraged by the fact that a pick-up in prices is expected soon and that BP management are committed to continue paying out current dividend levels." |
| Analysis: Kamal Ahmed, economics editor | Analysis: Kamal Ahmed, economics editor |
| In the final three months of 2014, the cost of a barrel of Brent crude was $77. In the final three months of 2015, it was $44. | In the final three months of 2014, the cost of a barrel of Brent crude was $77. In the final three months of 2015, it was $44. |
| Today it is $34. That is the background to today's results from BP. | Today it is $34. That is the background to today's results from BP. |
| Bob Dudley, BP's chief executive, told me two weeks ago that he expected the oil price to rise as high as$50-60 a barrel by the end of the year, as the oil majors desperately cut production and demand grows from China and the US. | Bob Dudley, BP's chief executive, told me two weeks ago that he expected the oil price to rise as high as$50-60 a barrel by the end of the year, as the oil majors desperately cut production and demand grows from China and the US. |
| Global supply and demand, at least from his company's point of view, will be in better balance, he argued. | Global supply and demand, at least from his company's point of view, will be in better balance, he argued. |
| It is clear from the strain the low oil price is putting on BP that another year of falling prices will mean yet more job losses in both the upstream (oil exploration and production, including the North Sea) and downstream (refining and sale of fuel) businesses. | It is clear from the strain the low oil price is putting on BP that another year of falling prices will mean yet more job losses in both the upstream (oil exploration and production, including the North Sea) and downstream (refining and sale of fuel) businesses. |
| Both of the main engines of the business are now spluttering and puffing out uncomfortable-looking black smoke. | Both of the main engines of the business are now spluttering and puffing out uncomfortable-looking black smoke. |
| That will put fresh pressure on BP's dividend, vital to our savings and pension funds. For the moment, BP says it is wholly committed to maintaining the payments. | That will put fresh pressure on BP's dividend, vital to our savings and pension funds. For the moment, BP says it is wholly committed to maintaining the payments. |
| More from Kamal | More from Kamal |
| Michael Hewson, chief market analyst at CMC Markets, said BP faces hard choices: "With average oil prices still trading at multi-year lows so far this year, the question now needs to be asked, how long can BP sustain the dividend at current levels without an imminent pick-up in oil prices? | Michael Hewson, chief market analyst at CMC Markets, said BP faces hard choices: "With average oil prices still trading at multi-year lows so far this year, the question now needs to be asked, how long can BP sustain the dividend at current levels without an imminent pick-up in oil prices? |
| "How many more jobs will BP need to cut from its already reduced 80,000 workforce in the coming months in order to sustain its payout against a backdrop of a possible ratings downgrade, and lower energy prices for longer?" | "How many more jobs will BP need to cut from its already reduced 80,000 workforce in the coming months in order to sustain its payout against a backdrop of a possible ratings downgrade, and lower energy prices for longer?" |
| BP's results are the latest in a round of weak fourth-quarterly earnings in the sector. | BP's results are the latest in a round of weak fourth-quarterly earnings in the sector. |
| Last week, Chevron announced its first quarterly loss in more than 13 years. | Last week, Chevron announced its first quarterly loss in more than 13 years. |
| Shell, which reports its fourth-quarter and full-year results on Thursday, has warned in a trading statement that its underlying profits could be halved. | Shell, which reports its fourth-quarter and full-year results on Thursday, has warned in a trading statement that its underlying profits could be halved. |