LONDON, Dec. 10 (UPI) -- At a time when crude oil prices continue to shed value, BP Chief Executive Officer Bob Dudley said Wednesday he was working to "right-size" the company.
Dudley told investors BP was streamlining its operations by eliminating redundancies and putting an end to activity he felt was not in line with the company's growth strategies.
"We have already been working very hard over these past 18 months or so to right-size our organization," he said. "We are clearly a more focused business now and, without diverting our attention from safety and reliability, our goal is to make BP even stronger and more competitive."
BP officials this week said the company would shed some of its workforce as it looks for a sustainable strategy in the evolving bear market for crude oil. In October, the company said it may cut as much as $2 billion in capital expenditures across the board for 2015.
"The simplification work we have already done is serving us well as we face the tougher external environment," Dudley said in a statement.
Though BP said it expects to incur "restructuring charges" of around $1 billion during the next five quarters, it said new programs will add more than 900,000 barrels of oil equivalent per day to its portfolio by 2020.
"Although the current environment is challenging, BP is well-positioned to respond and manage our upstream business for the long term," Lamar McKay, the company's director of exploration and production, said.
The price of oil, now hovering near the $65 per barrel mark, is at the point where some drilling programs, particularly in U.S. shale basins, may no longer be profitable.
"We expect to see growth from our conventional and deepwater assets and an increasing contribution from gas," McKay said.
BP said it approves projects based on oil at $80 per barrel, but examines them at $60 per barrel to weigh resiliency. The company said it would assess programs with oil priced lower than it is now "as appropriate."
