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The oil giant BP has said it will cut 5,000 jobs after reporting
"very disappointing" profits after refining margins were
squeezed and costs rose.
BP said the jobs were about 5% of its total global workforce, but
declined to pinpoint where the cuts would be. Two of BP's US refineries have
been operating below capacity
Replacement cost profits for the fourth quarter fell to $2.9bn (£1.4bn) from $3.8bn, sending annual profits
to $17.29bn - marking a 22% fall on 2006.
The results and cost cutting measures come after a difficult year for BP.
Hard times?
Low points in BP's year have included receiving a $50m fine for the 2005 Texas City refinery explosion in
which 15 people died.
The job cuts at BP are part of plans by the company to cut it overheads by 20% in order to boost profits and
close the gap on some of its larger rivals.
Last October, chief executive Tony Hayward said the firm's structure would be overhauled, by cutting down
on the number of layers in management as well as the number of businesses within the firm.
Last week, its rival Shell announced record annual profits of £13.9bn, marking a record for a UK-listed
company. On Friday, Exxon Mobil saw yearly profits of $40.6bn, setting a record for a US firm.
"It will not happen overnight, but we believe that the performance gap with our competitors can be
progressively narrowed in the next few years," said BP's chief executive Tony Hayward.
'Disappointing' profits
BP's refining and marketing operations were largely to blame for the fall in overall profits, it said, after
seeing a loss of $1.34bn for the fourth quarter.
Rising dividend
Despite the falling profits, BP raised its fourth quarter dividend by 31%, a move welcomed by investors.
"The numbers are disappointing, but I think that is more than made up for by the fact that we have got a
steep change in the dividend," said Peter Hitchens from Seymour Pierce.
"It's the end of the trough and the upturn starts in Q1 2008," said Jason Kenney from ING.
In early afternoon trade the firm's shares were 1.2% or 6.5p higher, at £5.48.