BP has announced plans to cut capital spending by 25% to $12bn this year in the wake of the oil price crash triggered by the coronavirus (Covid-19) pandemic.

The capital expenditure (capex) cut includes $1bn on company’s onshore activity, including in BPX Energy.

BP has also decided to defer certain exploration and appraisal activities, as well as optimise major project cut spend. It aims to cut costs by $2.5bn by the end of next year compared with 2019 levels.

BO Bernard Looney said: “The world is in a fight against Covid-19 and I want to thank all the people looking after us. The nurses and doctors, the first responders and the police. The people keeping food shops open and deliveries happening.

“And also the people we don’t see so much, like those behind the technologies that mean we can stay connected with our loved ones and with our work colleagues.

“Many, many are giving their time and risking their own well-being so that we can stay safe and sound. We rely on them, we are indebted to them, and I want to pay tribute to the sacrifices they are making on our behalf.”

Bernard Looney added that the current phase is the most brutal environment for oil and gas businesses in decades.

In December last year, BP and Reliance Industries (RIL) signed a definitive agreement regarding the formation of their new Indian fuels and mobility joint venture (JV).

Last August, BP agreed to sell its Alaska operations and interests to Hilcorp for $5.6bn, exiting a region it has operated in for 60 years.