BP Could Cut Jobs in the North Sea

BP is considering cutting some of its 3,600 Aberdeen-based workforce in a bid to control rising costs. All of the company's business units worldwide have been asked to look for ways to cut costs, but the North Sea is particularly at risk following spiraling costs which have escalated by 8 percent each year for the last six years.

Managers have been asked to look at a range of budgetary costs, from job cuts to travel and other expenses, and are due to report back to senior management in the middle of next month.

A BP spokesman said: "This may have an impact on people but we will not know the extent until February. We are very early on in the process." BP employs 2,300 people in its Aberdeen operations, including 800 contractors. A further 1,500 part-time and subcontractors, work offshore for the energy giant. The spokesman said it was too early to say what level of savings the company wanted.

"In the past, we looked to increase production which required more people and for the last five or six years we have been expanding. Now we are at the stage where we have to ask if all of this is still appropriate. "Our production is falling and if BP wants to keep its production static, then we will have to cut costs. "If we want to stay in the North Sea for the long term, which we do, we need to cut our costs."

Aside from the Clair field, which received the official go-ahead late last year, 25 years after it was discovered, BP has not made any major finds in the North Sea. The £650 million Clair project, 46 miles west of Shetland, will create about 1,000 jobs, 850 in construction and 150 offshore when it is completed in 2004. BP operates about 30 fields in the UK continental shelf and its operations account for 20 percent of British production.