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BP Announces Pay Freezes as Oil Prices Continue Slump

"We see this as a prudent response to the currently challenging market environment in which we are operating."  

LONDON -- Energy giant BP (IW 1000/4) said Tuesday it was freezing global salaries following a sharp drop in oil prices, less than two weeks after announcing 300 job cuts in the North Sea.

"We informed staff throughout BP that we intend to freeze base pay across the company for 2015, with only a select few necessary exceptions," a spokesman told AFP.

"We see this as a prudent response to the currently challenging market environment in which we are operating," he added, in reference to a slump of more than 50% in global oil prices since June.

The pay freeze was relayed to staff in an email from BP CEO Bob Dudley on Monday.

In December, BP took a restructuring charge totaling about $1 billion (800 million euros) in a companywide overhaul of the business.

As part of that plan, BP announced earlier this month that it was shedding 200 staff jobs and 100 contractors, all of them onshore, at its North Sea operations.

Speaking to the BBC last week from the World Economic Forum in Davos, Dudley said his company must face the possibility that oil prices will stay low for some time.

"Companies like us, at BP, we're going to need to rebase the company based on no guarantees at all that the price will come back up," he said.

"We have got to plan on this [price] being down, and we don't know exactly what level, but certainly a year, I think probably two and maybe three years."

Copyright Agence France-Presse, 2015

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