Jobs at risk as BP warns of $1bn restructuring plan amid oil-price plunge

Oil major BP warned of $1bn of restructuring charges over the coming year on Wednesday, as turmoil in the crude market continued with prices dropping to a fresh five-year low.

In a day-long presentation to investors in London, the company said it expects to incur non-operating restructuring charges of around $1bn in total over the next five quarters, including the current quarter.

Details of the charges will be given with each quarter's results, though the majority of the costs are expected to be related to job cuts.

Brent crude was trading 2.5% lower at $65.18 a barrel on Wednesday afternoon, having dipped below the $65 mark for the first time since mid-2009.

BP's chief executive Bob Dudley said that the company has over the last 18 months been "working very hard [...] to right-size our organisation" by selling off $43bn of assets.

“The simplification work we have already done is serving us well as we face the tougher external environment. We continue to seek opportunities to eliminate duplication and stop unnecessary activity that is not fully aligned with the group’s strategy," he said.

BP said it is looking to "pare or re-phase" capital expenditure (capex) and had already told investors in October that capex would fall by $1bn-2bn in 2015 against earlier guidance of $24bn-26bn.

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

BP also attempted to assure investors that not all of its business are equally exposed to the oil price, with one-third of its upstream projects operating under production-sharing contracts and the company investing in gas projects which are less sensitive to oil-price movements.

"Importantly, while BP approves projects at $80 a barrel, it also already tests each at $60 a barrel to understand the resilience of the portfolio at a range of prices. It will also continue to consider lower price sets as appropriate," the firm said.