BP slashed its 2015 capital expenditure budget by 20 percent Tuesday after posting a $4.4 billion net loss for the fourth quarter of 2014.
The company also booked a $969 million replacement cost loss for the fourth quarter.
The British super major earned $3.8 billion in 2014, down significantly from $23.5 billion in 2013.
The company took a $5.5 billion impairment charge tied to assets in the North Sea and Angola as well as low oil prices.
BP will spend about $20 billion on exploration projects this year, well below initial forecasts of between $24 billion to $26 billion.
The company reported an underlying replacement cost profit at $2.2 billion in the fourth quarter, beating analysts expectations of $1.5 billion.
BP also surprised investors by booking a $470 million profit from its 19.5 percent stake in Russia’s Rosneft despite western sanctions.
The Rosneft profits helped offset a 42 percent drop in BP’s upstream unit.
Upstream profits fell to $2.2 billion in the fourth quarter from $3.9 billion for the same period in 2013.
“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 program and cost base for the new reality of lower prices while always maintaining safe, reliable and efficient operations,” CEO Bob Dudley said.
BP is currently facing up to $13.7 billion in fines for its role in the 2010 Deepwater Horizon spill.