Why has BP been in the headlines in recent days?
BP sent shockwaves throughout Scotland when it announced on Friday that it had put its assets in the North Sea – including five major production hubs - up for sale.
The news sparked immediate concerns over the future of Scottish jobs and the North Sea oil and gas industry.
Aberdeen & Grampian Chamber of Commerce declared that the news was a “stark reminder that confidence in the UK Continental Shelf has been badly shaken after years of policy uncertainty, punitive taxation and mixed messages about the future of the industry”. It urged Prime Minister Andy Burnham to scrap the energy profits levy, which it argues is driving investment away from the North Sea, and replace it with an oil and gas revenue levy. The latter would include a permanent windfall tax mechanism that would be applied when prices are high.
What did BP say when it announced the decision?
The company did not directly comment on the energy profits levy in its statement on Friday. Chief executive Meg O’Neill said in press comments today that the North Sea was “not competitive” as a place to invest.
Harbour Energy, another major North Sea producer, has previously cited the levy, known popularly as the windfall tax, when announcing hundreds of job cuts in Aberdeen.
Read more:
- BP chief brands North Sea 'not competitive' as oil giant rakes in profits
- BP exit should 'serve as wake-up call' for Burnham as North Sea fears grow
What are the implications for jobs?
BP directly employs 1,100 in its North Sea operation, as well as a large number of contractors.
So far, BP has not said if jobs will be affected. However, in the statement announcing the sale, the company declared that its North Sea business has “world-class people, resilient assets and a proud heritage, and it is precisely these qualities that can attract an owner ready to back its next chapter”. The company added: “We are seeking an outcome that recognises that value.”
How long is the sale process likely to take?
No guidance has been provided by the company on the likely timescale for the sale process. However, new chief executive Meg O’Neill has wasted no time in downsizing BP since moving into post on April 1. As BP noted in its results statement for the second quarter today, the company sold its Austrian retail business in a deal announced on July 20 to Volenergy AG.
Yesterday, it agreed terms on the sale of a 42% stake in Kirkuk, its business in Iraq, to ConocoPhillips, while it sold its Gelsenkirchen refinery in Germany to investment firm Klesch Group in March.
BP announced yesterday that has put Archaea Energy, its US biogas business, up for sale.
Read more:
- What does BP exit say about future of the North Sea and Aberdeen?
- 'He was a visionary': Giant of Scottish business remembered
How is BP performing financially?
Very well. The company announced today that it had made an underlying replacement cost profit of $5.7 billion in the second quarter, $2.5bn higher than the previous quarter. The results underlined the boost oil and gas companies have received from the surge in oil and gas prices arising from the conflict in the Middle East.
The profits drew fire from unions and environmental campaigners.
Patrick Galey, fossil fuel lead at environmental campaign group Global Witness, said: “You know ‘Big Oil’ is taking us for a ride when one of their biggest allies, Donald Trump, is telling them to rein their profiteering in.
“BP’s sky-high profits are a scandalous reminder of who’s been cashing in on human misery this year. While wildfires threaten communities across the world, drought bites and energy costs spiral, ordinary families are paying the price for big oil’s prioritisation of shareholder wealth over a liveable planet.”
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