RPT-UPDATE 2-BP, Conoco to cut North Sea jobs as oil price plummets

(Adds BP comment, details, changes byline)

By Dmitry Zhdannikov

LONDON, Jan 15 (Reuters) - Oil majors BP andConocoPhillips will cut over 500 jobs in the North Seafollowing similar moves by rivals to reduce costs in one of theworld's most expensive exploration areas as oil prices tumble.

Although the cuts are relatively small for companies withdozens of thousands of employees, they come at a politicallysensitive time in Britain as the Scottish independence debatecontinues and a May parliamentary election looms.

BP said the cuts of 200 onshore staff and 100 contractorswere part of a previously announced $1 billion reorganisationaimed at simplifying the company's structure after it soldbillions of dollars of assets.

The head of BP North Sea, Trevor Garlick, said the cuts weredue to tougher market conditions, to ensure the competitivenessof operations and to align the company with steps taken by thewider industry. BP employs 4,000 people in the North Sea andanother 11,000 across the UK.

Fellow North Sea oil producer ConocoPhillips is cutting 230 jobs in Britain, with its UK workforce expected todrop to just over 1,400 by March, a spokeswoman said.

Rivals Royal Dutch Shell and Chevron announced job cuts in the North Sea last year.

Oil prices have collapsed over the last six months, droppingalmost 60 percent as a global glut has overwhelmed demand at atime of lacklustre world economic growth.

North Sea Brent crude oil was trading around $49.30a barrel on Thursday, down from more than $115 last June.

CASH MACHINE

Britain's North Sea oil and gas sector employs over 400,000people and has brought more than $200 billion in tax revenue tothe government, making it a vital part of Britain's economy.

News of job cuts in the sector have stirred concern amongthe country's politicians gearing up for elections in May.

"The government is determined to do everything we can towork with industry to make sure we can maintain those jobs,"British Energy Secretary Edward Davey, due to visit industryrepresentatives in Aberdeen on Thursday, told BBC radio.

Fergus Ewing, Scottish minister for business, energy andtourism, said the Scottish government had set up a task force tosee that could be done.

"In order to prevent the premature decommissioning of fieldsthere needs to be a clear signal sent to the operators, many ofwhom are headquartered in places like Houston and Calgary, thatthe UK government gets it," Ewing, a member of the ScottishNational Party, told BBC radio.

"The UK needs to send a signal that it values the industryas an enormous contributor to Scotland and the UK, not as agiant cash machine for the exchequer when the times are good."

The number of oil wells drilled in the British part of theNorth Sea fell to the lowest level in 15 years last year, datashowed on Thursday.

However, in a development showing that some majorexploration is still ongoing, France's Total andBritain's BG have started producing gas at the WestFranklin field in the North Sea.

(Additional reporting by Karolin Schaps and William James,;Editing by Christopher Johnson, Dale Hudson and David Evans)