Page 15 - EurOil Week 23

EurOil PERFORMANCE EurOil

BP to cut 10,000 jobs in

response to crisis

UK BP has announced plans to cut almost 10,000 BP introduced a three-month freeze on
jobs this year, or around 15% of its total staff, to redundancies back in March, but that morato-
CEO Bernard Looney stem its losses, with most of the workers due to rium is now over. Hardest hit will be manage-
told employees the be let go before year-end. ment, with more than half of most senior level
company was losing In a letter posted on the major’s website, CEO jobs to go, along with a third of group leaders.
millions of dollars every Bernard Looney told employees that the cuts BP is in the midst of a massive divestment
day. were essential for the company to manage in the programme, launched before the oil market cri-
face of massive market upheaval. sis began in March. The company said in Febru-
“The oil price has plunged well below the level ary it had already raised $9.4bn from asset sales
we need to turn a profit. We are spending much, since the start of 2019, having pledged to make
much more than we make – I am talking millions $10bn of disposals by the end of this year. It aims
of dollars, every day,” Looney said, noting that to shed $5bn of assets by mid-2021.
BP’s net debt had risen by $6bn in just the first Looney did not say whether BP would seek
quarter. to fast-track divestments in light of the crisis.
BP has slashed its capital expenditure by 25%, However, Bloomberg cited sources on June 4
or around $3bn. Looney said that staffing costs as saying that the UK major was in early talks to
amounted to around $8bn of the company’s divest a 10% stake in the prize Khazzar gas pro-
annual $22bn in running costs, and the aim is ject in Oman, in a bid to raise more than $1bn. It
to bring this figure down by $2.5bn in 2021, or is also reported to be considering a sale at the In
possibly more. Amenas gas plant in Algeria. ™

POLICY

Bulgaria to form state fuel firm to

ensure lower prices

BULGARIA BULGARIA’S parliament on June 5 gave the reserve for storage of oil products.
green light to a government plan to set up a However, critics of the idea fear the state is
Critics fear the state is state-owned company that would store oil and intervening too much in the economy. Instead
intervening too much in would be allowed to build filling stations and fuel of investing BGM500mn in setting up an oil
the economy. warehouses. company, experts suggest that the state should
The idea was suggested in May as a way to put efforts into making the Commission for Pro-
force oil companies to lower their prices. The tection of Competition (CPC) a strong and inde-
decision provoked many negative reactions by pendent institution that would prevent collusion
economists who claim it would not resolve the in the future.
problem but only shows the state is unable to The idea came after in April the CPC
deal with it. launched an investigation into suspected collu-
According to the government’s plan, sion among its members in setting fuel prices.
approved by the parliament in its first reading, Meanwhile, the government found out that
a state-run company will be set up. It will have fuel prices charged to buyers are higher than
to build 100 fuel retail stations throughout the the prices at which the fuel is released from
country in order to influence oil prices. warehouses.
The idea was originally proposed by the In May, CPC raided the offices of the Bul-
finance ministry, which suggested it would garian Oil and Gas Association as part of
secure the maximum level of competitiveness on its investigation aiming to find out how fuel
the market as it would operate fuel warehouses prices are being set by several companies,
across the country where it would store fuel for including Lukoil Neftochim Burgas, Lukoil
other companies as well. Bulgaria, Saksa, Insa Oil, Rompetrol, Shell
The new company, State Oil Company, Bulgaria, OMV Bulgaria, Petrol and several
should also execute the functions of a state other companies. ™

Week 23 11•June•2020 www. NEWSBASE .com P15