UPDATE 1-Tullow to begin oil sector job purge as weak prices bite

(Adds wider sector cuts, background, analyst comment)

By Karolin Schaps

LONDON, Jan 13 (Reuters) - Oil producer Tullow Oil is planning to cut some of its 2,000-strong workforce, a sourcefamiliar with the company said, starting an expected avalancheof job losses in the sector as companies struggle to cope withthe slump in oil prices.

Oil companies across the globe have been hit by a 60 percentdrop in crude prices in seven months, putting them underpressure to find new areas of their businesses where costs canbe trimmed.

"Tullow will be a smaller company," the source said, butgave no indication on the number of jobs likely to be cut.

London-listed Tullow Oil employs more than 2,000 peopleacross 22 countries, with its African operations accounting forhalf the total workforce.

The company has already cut its capital expenditure plansfor this year to $300 million, down from $1 billion invested inthe first half of 2014 alone.

It has also placed some of its smaller African offshoredrilling projects under review in an attempt to rein inexploration costs.

Ratings agency Moody's said it expected staff reductions atintegrated oil companies this year as part of their efforts torein in costs.

Analysts at Barclays predicted that oil majors' capitalexpenditure will fall by an average of 7 percent in 2015, with asharper focus on operating expenses, which include salaries.

British oil major BP has already announced a $1billion restructuring programme that will involve thousands ofjob cuts. Rival Shell, meanwhile, has said that it willcut 5-10 percent of workers at its Albian Sands mining projectin Canada. (Additional reporting by Dmitry Zhdannikov and Ron Bousso;Editing by David Goodman)