BP expects $1bn in restructuring charges in next year

BP has forecast about $1 billion of restructuring charges through next year as it overhauls its operations amid the crash in oil prices.

"The simplification work we have already done is serving us well as we face the tougher external environment," said chief executive Bob Dudley.

“We continue to seek opportunities to eliminate duplication and stop unnecessary activity that is not fully aligned with the group’s strategy.”

The non-operating charges will be incurred over five quarters including the current one, with further details given during each of the quarterly results, BP said in the statement.

Europe's third-biggest oil company by market value joins larger rivals Royal Dutch Shell and Total in restricting budgets and offloading operations as margins are squeezed by the 40 per cent drop in oil since June.

BP said in October that about $1 billion to $2 billion may be cut from the $24 billion to $26 billion of planned capital expenditure in 2015.

“This will be reviewed further as part of the 2015 plan, recognising the current outlook for oil prices,” it said.

BP has completed about $43 billion of asset sales since the 2010 oil spill in the Gulf of Mexico that was the largest in US history.

The offshore disaster has cost London-based BP more than $28 billion in cleanup costs and damages, and the company is still fighting battles on multiple fronts.

“We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas,” said Lamar McKay, head of the upstream exploration and production division. “Our focus throughout will remain firmly on safe operations, execution efficiency and greater plant reliability.”

Bloomberg