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British energy giant BP says it will axe 4700 staff jobs, about 5% of its workforce, and is cutting thousands of contractor roles to reduce costs.

The move is part of a “multi-year programme to simplify” the group and improve performance, BP said in a statement.

It comes as BP chief executive Murray Auchincloss puts the emphasis on oil and gas to boost profits, scaling back on the group’s key climate targets .

“We have got more we need to do through this year, next year and beyond, but we are making strong progress as we position BP to grow as a simpler, more focused, higher-value company,” he said in an email sent to employees and seen by AFP.

On the job cuts, which include more than 3000 contractor roles, he added: “I understand and recognise the uncertainty this brings for everyone whose job may be at risk, and also the effect it can have on colleagues and teams.”

BP, which has about 90,000 permanent staff based around the globe, indicated more job reductions were on the horizon.

“We expect around 4700 roles to be impacted ... accounting for much of the anticipated reduction in our headcount this year,” the company said.

“We are also reducing our contractor numbers by more than 3000, with 2600″ positions having already ended.

The company’s share price rose about 1.5% in afternoon deals on London’s top-tier FTSE 100 index, which was trading higher overall.

Cost-saving effort

Auchincloss, who took the top job after the departure of Bernard Looney, announced last year “at least” US$2 billion ($3.56b) in cost savings by the end of 2026.

He said in Thursday’s statement that 30 projects had been stopped or paused since June to focus on the “highest-value opportunities”.

The company is looking to boost its share price, which lags behind that of other oil majors, including rivals Shell, ExxonMobil and Chevron.

In recent years, BP’s climate targets have been chipped away.

It knocked back its emissions reduction plans in 2023, setting a target of a 20-30% reduction by the end of this decade compared with 2019 levels, down from its previous target of 35-40%.

It is also set to finalise a deal with the Iraqi government by early February to develop four oilfields in Kirkuk, northern Iraq.

BP last month said it would “significantly reduce” investment in renewable energy through to 2030, as it separated out its offshore wind operations into a stand-alone joint venture with Japanese power company Jera.

That echoed an announcement by rival Shell that it would no longer develop new offshore wind projects.

BP and Shell recently reported falls in their third-quarter profits and are set to announce annual results in the coming weeks.

Investors have been speculating for months that BP could abandon its pledge to reduce oil production by 25% by 2030 compared with its 2019 levels.

Auchincloss is expected to reveal his new strategy at an investor day in February.

© Agence France-Presse