CGTN Europe interviewed Gaurav Sharma, Energy Analyst, Oilholics Synonymous
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00:00Let's look now to Gaurav Sharma, Energy Analyst from Oilholics Synonymous.
00:04Good to see you back on the program.
00:06So, given these high oil prices we've been seeing,
00:10why the need for these large-scale job cuts?
00:14Good to be back on the program, Robin.
00:16I think the problem is largely of BP's own making.
00:19Let's go back to sort of middle part of 2020
00:22when the world started recovering and so did the oil companies
00:25from the ravages of COVID.
00:27Between 2020 and 2023, according to my research,
00:31Chevron's price went up by 50%, ExxonMobil's by 85%,
00:36Shell by 26%, BP by a very paltry 7%.
00:41Why? Because the CEO at the time, Bernard Looney,
00:44decided to reimagine BP.
00:46Those were his words, not mine.
00:48And what sort of reimagination was that?
00:50Instead of sort of focusing on the fragile recovery
00:54that the commodities market was seeing,
00:56they started going for overpaying for renewables.
00:59Those problems have now come into the in-tray of his successor,
01:03hence the job cuts.
01:05Let's talk about that reimagination of BP.
01:08As you say, the former CEO wanting to focus more on green projects.
01:13Do you think the new CEO will stick with that plan?
01:17I don't think so.
01:19I think what he's doing is pretty much what also Shell is also doing,
01:23sort of returning, going back to basics,
01:25going back to sort of their core offering of oil and natural gas.
01:29I don't think he will, but at the same time,
01:32he will stick with some of the renewables ventures that they've done.
01:35That said, BP last year truncated a lot of its shares.
01:38It sold off its U.S. offshore renewables business.
01:41It tried to reimagine how it was going to approach retail points,
01:45fuel retail points.
01:47All of that is happening, and now this is the next phase,
01:49the next draconian phase of almost 8,000 job cuts.
01:534,700 staff, another 3,000 contractors,
01:56nearly 5% of its global workforce.
01:59So it's got this cost reduction target, hasn't it, BP,
02:02of $2 billion by the end of 2026.
02:05How is it going to achieve that?
02:07It must be more than job cuts, surely.
02:09Oh, absolutely.
02:11I think there's got to be efficiency savings elsewhere.
02:14I think what the markets are watching out for is that,
02:16I think of one-fourth of that $2 billion figure,
02:19it has to be achieved by the end of this year.
02:22And I think you will see reductions, cost reductions elsewhere,
02:25certain asset sales.
02:27But, yes, I think job cuts alone won't do the trick.
02:32Gaurav, great to talk to you.
02:33Thanks again for coming on the program.
02:35That's Gaurav Sharma, the energy analyst from Oilholics Synonymous.