BP plans to spend $1 bn on restructuring business in 2015

Dec 10, 2014 12:00 AM

Oil and gas giant, British Petroleum (BP), has said it would spend $1 billion on a general streamlining of the firm’s operations in the coming year.

This emerged as it presented to investors its strategy and plans to the end of the decade and beyond for its Upstream oil and gas business.

BP has operations in South Africa, Algeria, Angola, Egypt and Mozambique in addition to other parts of the globe like Middle East, the Americas and Asia.

The day-long presentation, led by BP’s Upstream CEO, Lamar McKay, provided an in-depth and detailed account of how BP is managing its Upstream business and its distinctive strategy for the long term. The presentation also reviewed the macro-environment and the context of recent developments in oil prices.

McKay and senior members of his upstream management team shared further insights into the depth and quality of the group’s resource base and investment portfolio, which underpin BP’s long-term value proposition through the changes in the price environment.

“Although the current environment is challenging, BP is well-positioned to respond and manage our Upstream business for the long term,” McKay said.

“We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas. And we also have a quality pipeline of opportunities that we believe are capable of extending underlying growth well beyond 2020. Our focus throughout will remain firmly on safe operations, execution efficiency and greater plant reliability,” he added.

BP also said it is likely to incur non-operating restructuring charges of about $1 billion in total over the next five quarters, including the current quarter.

Bob Dudley, Group CEO said: “We have already been working very hard over these past 18 months or so to right-size our organisation as a result of completing more than $43 billion of divestment. We are clearly a more focused business now and, without diverting our attention from safety and reliability, our goal is to make BP even stronger and more competitive.”

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