His stark message came as the group slumped to a $969 million (£645m) replacement cost loss for the fourth quarter, down from a profit of $1.51bn for the same period in 2014.
BP recorded a $3.6bn hit including write-downs on North Sea and Angolan assets and on the oil price.
Its results came as oil and gas exploration firm BG Group – a spin-off from the privatisation of British Gas – also slashed capital expenditure plans for 2015, by $6bn-£7bn. The price of Brent crude slumped since last summer by more than half to $45 a barrel in January, though it has since bounced back to $55.
Mr 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.”
Annual replacement cost profit for 2014 was down 66 per cent to $8.07bn.
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