Oil Industry Starts New Round of Cost Cuts as Oil Slump Persists

30-Jul-2015

BP Plc and Chevron Corp. fired the opening salvo for a further round of cost cuts by major oil companies grappling with the prolonged collapse in crude prices.

“It’s really tough times for the industry,” BP Chief Executive Officer Bob Dudley said Tuesday, comparing the market to 1986 when tumbling prices forced drastic cost savings.

Oil explorers are seeking large discounts from contractors and sending some projects back to the drawing board to find cheaper ways to build them after crude prices dropped by half in a year. Many already announced multibillion-dollar cuts three months ago when they released first-quarter results in a bid to reassure investors they would be able to pay dividends.

Producers are now feeling the layoff pain that has mostly plagued oilfield service providers over the past year.
Chevron said Tuesday it’s eliminating 1,500 jobs to curb spending by about $1 billion. The job cuts announced by the San Ramon, California-based producer ahead of its earnings release on July 31 represent 2.3 percent of its global staff. (by Javier Blas and David Wethe, Bloomberg Business.