OIL firm BP has warned cuts to its business will cost £638m in the next year.

The bill will reflect the need to downsize operations following £27.5bn worth of divestments since the 2010 Gulf of Mexico disaster.

The company previously warned the rate of job losses across the UK and abroad will increase, with the focus likely to be on head office and back office roles.

About 15,000 of BP's employees are UK-based, while the company employs 84,000 people worldwide.

The move to simplify the business comes with the price of oil at around 65 US dollars a barrel, some 40 per cent below its level earlier this year.

Bob Dudley, chief executive, said: "We are clearly a more focused business now and, without diverting our attention from safety and reliability, our goal is to make BP even stronger and more competitive."