BP has further reduced its spending plans after the oil price collapse caused profit to slump by 40% in the third quarter.
Profit for the three months to the end of September fell to $1.8bn (£1.2bn) from $3bn a year earlier, although the result was better than the $1.2bn analysts had forecast.
The plunge in profits is a direct result of the collapse in oil prices, with North Sea Brent blend averaging around $50 a barrel in the last quarter, compared with $102 during the same period in 2014.
BP and other oil companies have responded to the low oil price by slashing costs and spending on projects. This year it expects to spend about $19bn on capital projects, down from an estimate of up to $26bn a year ago.
Capital spending will fall to between $17bn and $19bn a year through to 2017. The company also cut non-investment costs by $3bn in the first nine months of the year.
Replacement cost profit before tax from exploration and production plunged 79% to $800m while profit from so-called downstream activities such as refining increased 53% to $2.3bn.
BP said: “The result primarily showed the impact of sharply lower oil and gas prices but also the benefits of a continuing strong downstream environment and performance and steadily lower cash costs throughout the group.”
Oil company shares have come under pressure as investors fear the persistently low oil price could force a cut in dividends. Bob Dudley, BP’s chief executive, said the company was determined to keep its dividend to shareholders of 10 cents a share, up from 9.75 cents a year earlier.
Dudley said: “Last year, we acted decisively to reset BP for a sustained period of lower oil prices and the results are coming through well. We are now in action to rebalance our financial framework in this new price environment. This underpins our strong priority of sustaining our dividend and then growing free cash flow and shareholder distributions over the long term.”
BP shares were the biggest gainers in the FTSE 100 index, rising 1.8% to 391.5p.
The oil company agreed to pay a record $18.7bn environmental fine in July to settle legal actions in the US over the fatal 2010 Gulf of Mexico oil spill. A US court is scheduled to consider approval of the final settlement in March, BP said.
The depressed oil price is the result of increased global supplies, particularly in the US, and falling demand for energy as the Chinese economy slows. TheInternational Energy Agency has said higher production by Opec and a continued tailing off in world economic growth means the price of oil will stay low throughout 2016.