BP axes another 800 UK jobs

BP, the oil giant that believes Gordon Brown's new North Sea tax will cost it more than £120m a year, today revealed it is to slash another 800 UK jobs as part of its cost cutting drive.

The losses will be in addition to the 500 jobs BP said in March it would axe and means its UK workforce will be sliced by 20% before the end of the year.

BP said the 800 jobs cuts would all be made among its contracting staff, who are based in Aberdeen and at various other locations, including offshore operations, around Scotland.

A spokesman denied the cull was a direct result of the North Sea tax introduced in the April Budget, which BP estimates will lift the amount of tax it pays on these operations by 10%.

'We need to do this to maintain our competitiveness in the North Sea,' he said. 'Extraction costs are going up as fields get older and become more expensive to develop.'

The jobs cuts are expected to lead to a fall in the number of people manning some offshore platforms, as well as a reduction in the development programmes associated with some projects.

The move will also fuel speculation that BP plans to sell some of its North Sea operations and wind down others in an effort to reduce its average production cost in the light of weaker oil prices.