BP has reported lower profits for the fourth quarter of 2014 and announced it will reduce exploration investment due to the decline in oil prices.
The company’s underlying replacement cost profit was $2.2bn in Q4, compared with $2.8bn for the same period in 2013.
BP took a $3.6bn post-tax net charge for non-operating items in the quarter, associating particularly to impairments of upstream assets due to lower oil prices, revisions to reserves and other factors.
BP group chief executive Bob Dudley said: "We have now entered a new and challenging phase of low oil prices through the near and medium term.
"Our focus must now be on resetting BP, managing and rebalancing our capital programme and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations."
The company is taking measures to respond to lower oil prices and to rebalance its sources and cash utilisation accordingly.
BP aims to lower exploration expenditure and postpone marginal projects in the upstream sector this year.
The company is also planning to not advance selected projects in the downstream sector and other areas.
The moves are expected to result in organic capital expenditure of around $20bn this year, significantly lower than the earlier guidance of $24bn to $26bn.
BP has agreed divestments with a cumulative value of $4.7bn since 2013. The company expects the divestment total to reach $10bn by the end of this year.
Image: BP group chief executive Bob Dudley. Photo: courtesy of BP.