BP, the U.K. oil giant, is slashing costs as it prepares for a long-term low oil price environment.
The company is now planning for around $60 per barrel price for Brent crude until at least 2017, after a sustained fall in the price of the commodity over the past year. It also plans a further $3-5 billion worth of asset sales next year. Its share price rose by more than 2 percent in early London trading Tuesday following the announcement.
There was good news for investors in the company's continued commitment to dividend payouts, with a quarterly dividend of 10 cents per ordinary share, expected to be paid in December.
Bob Dudley, chief executive of BP, said in a statement: "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."
Investment bank Goldman Sachs this week warned of downside risk for oil prices through spring 2016.
Jason Gammel, equities analyst at Jefferies said lower oil prices would weigh on energy stocks until the end of the year.
"My personal opinion is that $60 will not even be sufficient to balance the market by 2017," he said, but to balance the company dividend it seemed "reasonable".