BP to cut 5,000 jobs as profits fall by a fifth

Profits at BP, the UK's largest company, fell 22 per cent to $17.29 billion (£8.7 billion) last year. The oil giant confirmed it would cut 5,000 jobs and target a 20 per cent reduction in overheads by the middle of next year.

Chief Executive Tony Hayward said the competitive financial performance of refining and marketing was “very poor, despite the fact that we have a strong set of assets. The principal reason is poor reliability in some of our US refineries”.

BP shares rose 13p or 2.4 per cent in early trading to 555p.

The oil company took a one-off charge of over $1 billion in the last quarter of the year to cover the costs of restructuring of its business. This included a management shake-up following the departure of Lord Browne of Madingley, its chief executive, in May and an overhaul of the North American business, which was criticised for a series of accidents and operational mistakes.