BP has frozen the pay of its 84,000 staff around the world in response to the plunge in the oil price, which has more than halved in the past six months.
Weeks after cutting 300 jobs in Aberdeen, the oil company’s boss, Bob Dudley,
sent a memo to all its staff outlining the decision to hold salaries at
last year’s levels because of the harsh trading environment.
BP is among major companies responding to the price fall, which
has already led to Shell, Premier Oil and Norway’s Statoil taking steps
to cut costs. Projects have been put on hold and contractors’ pay cut.
Performance-related bonuses were not included in Dudley’s memo to
staff, which was sent in advance of the FTSE 100 company’s full-year
results next week.
“The tougher external environment in 2015 means that our
businesses and functions need to work … to take a number of measures in
response to the harsh trading environment,” Dudley said, according to a
memo reported by Reuters. “One of the measures we are taking across the
group is a general freeze to base pay for 2015, with only a few
exceptions for specific circumstances around the world.”
Dudley received $13.7m (£9.1m) in pay, annual bonuses, deferred
bonuses and pension in 2013. His salary was increased by 2.8% to $1.8m,
last year’s annual report shows.
The North Sea Brent crude benchmark is trading below $50 (£33.20)
a barrel, its lowest level for more than five years, presenting
challenges to oil producers that have based their business plans on the
basis of much higher prices.
While policymakers such as the Bank of England governor, Mark
Carney, have said lower oil prices should help the wider economy and
fuel growth, the impact on the oil industry is starting to be felt.
Dudley told the BBC last week, when he was attending the Davos
meeting of the World Economic Forum, that the oil price could stay low
for two to three years.
“Companies like us, at BP, we’re going to need to rebase the
company, based on no guarantees at all that the price will come back
up,” he said last week. “We have go to plan on this [price] being down,
and we don’t know exactly what level, but certainly a year, I think
probably two and maybe three years.”
BP employs about 15,000 people in the UK and the jobs being lost
in Aberdeen are connected to the North Sea, where industry experts have
warned as many as 100 fields could be in danger.
No comments:
Post a Comment