January 08, 2002 --- Vol. 8, No. 4January 2002

BP laying off 20 percent of Anchorage-based staff

BP Exploration (Alaska) Inc. told Anchorage employees yesterday that it is reducing Anchorage-based staff by 20 percent.

BP Exploration (Alaska) spokesman Ronnie Chappell told PNA the company's goal is to make the company viable in the long term, and said focus will be on competitive replacement of production and reserves:

"We didn't just announce a reduction in force today, we rolled out a strategy for sustaining our business in Alaska over the long term," he said. That strategy "involves cost-competitive replacement of production and reserves.

"We will continue to invest in what is one of the largest reserve bases in all of BP. But we're going to be more selective in the investments that we make," Chappell said.

He also said that BP's Liberty project, offshore east of Endicott, is being shelved "after a review of the project and a determination that it is not competitive as a Northstar lookalike."

The company's focus will be in and around existing fields, he said. Reserves at Prudhoe Bay, Kuparuk and Milne Point are 7 billion barrels, "about one-third currently competitive." BP "would like to increase that 30 percent to 40 or 50 percent."

Chappell said BP has about 1,500 employees in Alaska, about 600 based in Anchorage. The Anchorage staff will be reduced by 20 percent, he said, with 120 employee and 75 contract positions to be cut.

Northstar is pretty much completed and is moving from construction into operation and maintenance, Chappell said: "So the construction organization for Northstar is going away; those positions being eliminated." Last year BP brought a substantial number of people to Alaska to participate in the $100 million project to access natural gas. That project is largely completed and the size of that organization is being reduced to match the work plan for the coming year, which will be focused on working with state, federal, Canadian central and provincial governments to develop "a fiscal and regulatory regime in which that project can move forward," he said.

The exploration jobs that shifted to Houston with the decision last year to shift of responsibility for frontier exploration out of Alaska are also part of this 120. Chappell said the company is not providing a specific breakdown of where the jobs are, but he said there will be "reductions in every organization in the company."

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