BP said on Tuesday it could cut capital spending further after reporting an 80 percent drop in profits in the first quarter of the year, when oil prices touched a near 13-year low.
Chief Executive Officer Bob Dudley nevertheless said he expected crude prices to recover towards the end of the year as producers halt work on fields and fuel demand remains robust.
“Market fundamentals continue to suggest that the combination of robust demand and weak supply growth will move global oil markets closer into balance by the end of the year,” Dudley said in the results statement.
Faced with the worst downturn in the oil sector in at least three decades, BP reduced its capital spending three times in 2015 to $19 billion, slashed nearly 10 percent of its around 80,000 workforce and sharply lowered costs.
BP slipped to its biggest annual loss last year as a result of lower oil prices, costs related to the settlement of a deadly 2010 Gulf of Mexico oil spill and huge writedowns.
The company said it expected its 2016 capital expenditure to reach $17 billion, at the lower end of its previous guidance, and that “in the event of continued low oil prices” it saw further flexibility to lower spending to $15-$17 billion.
It also expected 2017 cash costs to be $7 billion lower than for 2014.
BP’s first quarter underlying replacement cost profit, its definition of net income, was $532 million, down from more than $2.6 billion a year earlier but beating forecasts for a loss of $140 million, according to consensus figures provided by BP.
Its refining and trading segment, known as downstream, once again came to the rescue with a quarterly profit of $1.8 billion, offsetting a $747 million loss in oil and gas production.