BP Trinidad may cut jobs but not oil investments

THE GLEANER, WEDNESDAY, JANUARY 20, 2016 • www.jamaica-gleaner.com •
B
P TRINIDAD & Tobago
(BPTT) says it is likely
to invest more than
US$1.5 billion, despite the drop
in oil prices on the world market,
and plans to rationalise costs at
the company.
“As a testament to our
confidence in the future, we spent
close to US$1.5 billion in 2015,
and if the surface conditions are
right, we will spend more than that
in 2016, despite the significant
negative impact of prices on our
earnings, and cash flow,” said
BPTT regional president Norman
Christie while addressing the
Trinidad & Tobago Energy
Conference in Port of Spain on
Monday.
BPTT previously announced
that it would be making cuts at
the company, given the prevailing
conditions for oil.
“Downturns like the one we
are in result in major dislocations
for employees, contractors,
communities, partners and the
country,” Christie said Monday.
He said BPTT’s rationalisations
“may result in job losses” and
that the company would adhere
to local laws that guide such
separations.
Last week, BPTT said its
focus was cost efficiencies in its
business in 2016, which would
include “a review of third party
costs, activity prioritisation,
jamaicagleaner • BUSINESS
BP Trinidad may cut jobs
but not oil investments
process simplification and
organisational structure”.
Christie told Monday’s energy
conference the plans are still
under review and specific
numbers are to be finalised.
CONFIDENT IN PROSPECTS
He also said the company was
confident in the economic
prospects of Trinidad and
Tobago.
“It is encouraging to hear that
despite low energy prices, there
is much activity in the upstream,”
Christie said, adding, “we opened
the year to hear of BHP’s plans to
begin development in TT’s deep
water, and of the government’s
positive discussions with
Venezuela that can potentially
lead to increased opportunities
for both countries,” said the oil
executive.
“These future focused plans
are just what our country needs
to boost confidence in our
energy sector.”
BPTT’s newest investment,
the Jupiter Project in which it
has pumped US$2 million, is
expected to increase its
production to pre-2012 levels to
help alleviate current gas
shortfalls, the company said at
the weekend, and that the “first
gas from the facility” is
expected in 2017.
Meanwhile, The Trinidadian
government said Monday that
Prime Minister Dr Keith Rowley
is leading talks with BHP Billiton
executives, including President of
Exploration Dr David Rainey,
Vice-president of Exploration Dr
Niall McCormack, and president
of BHP Billiton TT, Vincent
Pereira.
“The parties discussed
matters relating to BHP
Billiton’s involvement in the
energy sector in Trinidad and
Tobago with a view to a
continued mutually beneficial
relationship,” Port of Spain said
in a statement.
– CMC
Bank of America profit rises,
but says growth a struggle
BANK OF America reported
higher profits on better
performance in consumer
banking and lower costs, but the
bank acknowledged that it is
struggling to increase revenue
despite an improving United
States economy.
BofA said Tuesday it earned
a profit of US$3.01 billion, or
28 cents per share, after
payment of dividends to
preferred shareholders. That’s
an improvement of nearly 10
per cent over the US$2.74
billion, or 25 cents per share
the bank earned during the
same period last year. The
results beat expectations.
Analysts surveyed by Factset
expected earnings of 27 cents
per share, on average.
For the year, Bank of America
earned US$14.41 billion, up from
US$3.38 billion a year earlier.
BofA CEO Brian Moynihan
said in a prepared statement that
results for the year, which were
the highest earnings in a decade
for the bank, were the result of
“doing more business with each
customer and client”.
But in a conference call with
investors, the bank’s Chief
Financial Officer Paul Donofrio
said that growing company
revenue has been difficult. Bank
of America is more heavily
exposed to low interest rates
gleanerjamaica •
than other big banks because it
depends so heavily on its large
retail banking business, and less
so on trading.
“Although the US economy is
improving slowly, revenue growth
remains challenging,” he said.
Revenue at BofA’s consumer
banking business, by far its
largest business, rose by just 0.4
per cent in the quarter to
US$7.79 billion. The division
was able to boost profits,
though, by nine per cent. It
reported net income of US$1.8
billion, versus US$1.65 billion a
year earlier, as deposits and
loans grew in the quarter.
The bank’s trading division
also did well compared with last
year, despite choppy and
difficult markets last quarter.
The division, called “global
markets”, had a profit of
US$185 million in the quarter
versus a loss of US$75 million a
year earlier. Revenues for the
division were US$3.33 billion
in the quarter, up from US$3.01
billion.
“Solid result in a tough quarter,”
said Keith Horowitz, an analyst
with Citigroup, in a note to
investors.
The bank’s cost-cutting
efforts were the result in part of
a reduction of employees by
more than 10,000 people, or five
per cent, to 213,280 from
223,715 a year ago, mostly from
its Legacy Assets and Servicing
division. It also closed 129
branches, leaving the bank with
4,726. It was the fourth year in a
row that BofA has cut its number
of branches.
– AP
D7