BP won’t fire employees in next three months: CEO

BP will not lay off any of its employees in the next three months as result of coronavirus-related cost cutting, its CEO said on Wednesday, while announcing a 25% capex reduction.

“Job security is a big worry at this time,” Bernard Looney said in a market update note. “We simply do not want to add another burden during what is already an incredibly stressful time for individuals and families.”

The British oil major announced a number of actions "to protect its financial health," including slashing $2 billion spend from both its upstream and downstream operations.

Looney said the company has implemented a number of measures to ensure everyone is healthy, including shift patterns to make social distancing easier, restricting workplace access and enabling safe isolation and evacuation of any suspected cases of Covid-19.

To reduce the risk of the virus spreading, BP is reducing non-essential activity and manning levels. In Indonesia, the company decided to remove thousands of construction staff from the Tangguh expansion project.

The pandemic has not had any significant operational impact in the first quarter, but Looney warned this could change through the second quarter. Total Q1 upstream production is estimated at 2,550-2,600 barrels of oil equivalent per day (Boe/d), which is lower than Q4 2019.

However, the coronavirus crisis has significantly impacted BP’s downstream business due to the growing decline in demand for fuels, jet fuel and lubricants, as countries applied measures to contain the pandemic. BP saw the negative impact first in China, and then in its larger markets of U.S. and Europe.

The effects of the Covid-19 crisis on BP’s Q1 financial results will be reported on April 28. The company said it expects a non-cash, non-operating impairment charge of around $1 billion for the Jan-March period.

Source: Kallanish Energy