BP is seeking to reduce spending after the collapse in oil prices sent its shares to their lowest in 24 years, Chief Executive Bernard Looney said on Friday, report agencies. The slump, sparked by the spread of the coronavirus and the collapse of a supply cut deal between major oil producing nations, reaffirms BP's aim to reduce its oil and gas business, Looney, who took office a month ago, said on LinkedIn.
In response to the coronavirus outbreak, BP employees were instructed to work from home, with the exception of critical operations, Looney said. London-based BP, which employs 73,000 people, will hold no large meetings and restrict travel, he added.
Oil prices were on track for their worst week since the 2008 global financial crisis after the coronavirus outbreak rocked the world economy while top exporter Saudi Arabia and its allies stepped up plans to flood the market with record levels of supply.
BP's shares, which closely track crude prices, collapsed this week to their lowest since 1996. "To protect the health of our company we are making interventions to reduce capital and operational spending," Looney said, without elaborating.
"BP is strong and, importantly, we have navigated challenges like this before. We know what to do."
Looney said recent events reaffirm his ambition to radically reshape BP, which spent $15 billion last year mostly on its oil and gas operations, by shifting to renewable energy and slashing carbon emissions to net zero by 2050.
"Some people have also questioned how the current circumstances affect our purpose and net zero ambition. I can understand why they might ask that. But to me, I think what is going on now only reaffirms the need to reinvent our company. And we will." Several oil and gas companies, including Chevron, have in recent days announced plans to slash spending, particularly in the US shale basins.