By Ed Crooks, Energy Editor
Published: October 11 2007 13:37 | Last updated: October 11 2007 13:37
BP, Europe’s second-biggest oil company, on Thursday announced a wide-ranging restructuring designed to close the gap with its competitors.
The company’s operations are to be reorganised to reduce organisational complexity and improve consistency.
Thousands of jobs could go over the next two years as the restructuring takes effect. Tony Hayward, who took over as chief executive in May, described the company’s overhead costs as ”unacceptably high”.
However, BP said the ”major benefit” of the changes would come from ”the revenue boost expected from greatly improved operational efficiency over the longer term.”
BP has suffered a series of problems in recent years, particularly in the US, including delays to important projects in the Gulf of Mexico, oil spills in Alaska and the explosion at the Texas City refinery in 2005 that killed 15 people.
BP’s third-quarter results, due on October 23, are expected to show it lagging well behind its rival Royal Dutch Shell in terms of profitability. Its share price performance relative to its peers has been the worst since BP was forced to cut its dividend in 1992.
However, analysts believe the third quarter may mark a nadir in BP’s fortunes, with revenues set to pick up thanks to big projects coming on stream such as Greater Plutonio in Angola, which is already in production, and Atlantis in the Gulf of Mexico, which is currently starting up. The US refineries at Texas City and at Whiting, which suffered a fire this year, are expected to return to full capacity next year.
BP shares rose 11p or 1.9 per cent to 591p in early afternoon trading
Mr Hayward said the aim of the restructuring was to sustain that recovery in revenues into the longer term.
He said: ”BP’s performance has materially lagged our peer group in the last three years. It has been poor because we are not consistent and our organisation has grown too complex. At the root of all this is a need to change our behaviours.”
The restructuring is intended to foster that change in behaviour. Some central functions will be cut back, and in some parts of the company four layers of management will be shed. The gas, power and renewables division is to be broken up, and its businesses distributed around other parts of the group.
BP’s operations will also be subject to much greater standardisation, to spread best practice throughout the group.
The restructuring follows a six-month review of BP’s performance, and advice from McKinsey and Bain, the consultancies.
Copyright The Financial Times Limited 2007
This website and sisters royaldutchshellplc.com, shellnazihistory.com, royaldutchshell.website, johndonovan.website, and shellnews.net, are owned by John Donovan. There is also a Wikipedia segment.
Royal Dutch Shell conspired directly with Hitler, financed the Nazi Party, was anti-Semitic and sold out its own Dutch Jewish employees to the Nazis. Shell had a close relationship with the Nazis during and after the reign of Sir Henri Deterding, an ardent Nazi, and the founder and decades long leader of the Royal Dutch Shell Group. His burial ceremony, which had all the trappings of a state funeral, was held at his private estate in Mecklenburg, Germany. The spectacle (photographs below) included a funeral procession led by a horse drawn funeral hearse with senior Nazis officials and senior Royal Dutch Shell directors in attendance, Nazi salutes at the graveside, swastika banners on display and wreaths and personal tributes from Adolf Hitler and Reichsmarschall, Hermann Goring. Deterding was an honored associate and supporter of Hitler and a personal friend of Goring.
Deterding was the guest of Hitler during a four day summit meeting at Berchtesgaden. Sir Henri and Hitler both had ambitions on Russian oil fields. Only an honored personal guest would be rewarded with a private four day meeting at Hitler’s mountain top retreat.
IN JULY 2007, MR BILL CAMPBELL (ABOVE, A RETIRED GROUP AUDITOR OF SHELL INTERNATIONAL SENT AN EMAIL TO EVERY UK MP AND MEMBER OF THE HOUSE OF LORDS: 
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A head-cut image of Alfred Donovan (now deceased) appears courtesy of The Wall Street Journal.
