BP Raises Pressure on Suppliers Amid Lower Oil Prices

LONDON (Dow Jones Newswires), Feb. 9, 2009

U.K.-based BP PLC is arranging meetings with U.S., U.K. and other suppliers to press for cost cuts as the oil price falls, the Financial Times reported on its Web site, citing company officials.

Existing contracts won't be changed but BP hopes to re-negotiate contracts that are soon up for renewal and lower the costs of projects planned in areas including the Gulf of Mexico, Egypt and Angola, the newspaper reported Sunday.

It quoted BP chief executive Tony Hayward as saying last week that he wanted to "drive deflation into the supply chain" to reverse rising costs.

The report quoted Andrew Inglis, BP head of exploration and production, as saying that there are chances to cut costs on projects that are near final investment decisions to deliver better returns, and that "we believe there is opportunity to work with our contractors to drive that capital efficiency."  

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