Amid a slump in oil prices and renewed takeover speculation, UK major BP (BP.) revealed that it expects to incur restructuring charges amounting to $1bn (£0.64bn) over the next five quarters. The group will outline the full details of its rationalisation programme over coming months, but it ties-in with news earlier this week that it would accelerate plans to cut back thousands of non-core administrative posts.
BP has been trimming its sails ever since 2010’s Deepwater Horizon disaster, but the prospect of a prolonged slump in crude oil prices has impelled management to drive through new cost-cutting initiatives. The group has already pared back its upstream operations substantially since 2010, including around $32bn in divestments, so presumably it shouldn’t be too difficult for management to identify areas of duplication within the global business.
The financial strain of Deepwater Horizon still casts a pall over the immediate prospects for the group. Earlier this week, The US Supreme Court refused to review the group's $9.7bn settlement over the Gulf of Mexico spill, thereby rejecting BP’s claim that hundreds of millions of dollars are going to businesses that weren’t affected.
It’s not all doom and gloom. The group said that it remained on track to deliver another 900,000 barrels of oil equivalent a day of net production to its upstream portfolio by 2020. And it also announced that it is planning to invest $12bn in its Egyptian operations over the next five years, in addition to doubling its gas supplies to the local market in the next decade,
