Oil giant BP is being cut down to size by tumbling oil prices, according to reports.
The Sunday Times has reported that the company is to axe middle managers and freeze projects, just days ahead of a day-long presentation to the City next Wednesday in which BP is expected to lay out its exploration and production plans until 2020.
Oil prices slipped back down to near five-year lows last week, with Brent crude closing at $69 per barrel on Friday – marking a 40 per cent drop from a year-high price of $114.9 per barrel in June.
Some analysts predict the price could fall as far as $60 in the first few months of next year
BP is now also expected to cut its oil price assumption used to measure its day-to-day budget.
Any executive decision to restructure the company which currently has 84,000 staff will likely have been sparked by the Organisation of the Petroleum Exporting Countries’ (Opec) decision last month to continue oil production at its current rate. Those hoping for a recovery in falling oil prices were hoping for an agreement to reduce output.
Last week BP was the subject of speculation suggesting it could be sold to Shell for just £5 per share, causing a brief uptick in its share price to 440p. However by closing time last Friday afternoon shares in BP were back down to 424p per share.
Alongside falling oil prices, BP has been hurt by economic sanctions placed on Russia due to its number of assets in the country.
BP owns a 19.75 per cent stake in the Kremlin-controlled oil company Rosneft which contributed to a fifth of its underlying profits in the first half of the year.