BP Exec Says Most Job Cuts Will Occur in U.S.

Most of the 6,000 initial job cuts expected from the $49-billion British Petroleum-Amoco Corp. merger will occur in the United States, BP Chief Executive John Browne said Wednesday.

The merger will have the “greatest impact” on the combined U.S. refining and marketing operations of the two companies, Browne said at a conference for media and Wall Street analysts a day after the deal was announced.

The deal, essentially a takeover of Amoco by BP, is the largest ever in the oil industry and the largest corporate combination in history outside of the telecommunications and banking sectors.

Browne did not provide a detailed breakdown of the job cuts in the United States. But he said half of the initial $2 billion in savings expected by the end of 2000 would come from job cuts, and the bulk of those would be in the United States.

A BP spokesman said that 1,000 jobs alone would be lost from the company’s Cleveland operation because the group’s refining and marketing headquarters will be relocated to the Amoco head office in Chicago.

The enterprise, to be called BP Amoco, would be the third-biggest oil company in the world. It would be the leader in the United States in terms of oil and gas production as well as retail gasoline business, with 14% of that market.

Amoco Chairman Larry Fuller said Wednesday that a sale or closure of one or more of the combined group’s seven refineries in the United States cannot be ruled out, though he noted that they were widely dispersed.

Industry sources said both companies have some gasoline retailing overlap in the central United States, which will probably be closely examined by the government’s antitrust divisions. The Justice Department and the Federal Trade Commission have yet to decide which organization has jurisdiction over the matter.

After the initial work force cut of 6,000, BP Amoco would have a worldwide work force of 100,000. Exxon’s global work force numbers about 80,000.