BP has signalled it sees long term potential in the North Sea which will remain a major source of production for years although the company is buckling down for a long period of low oil prices.

Chief executive Bob Dudley said the oil and gas giant is preparing for Brent crude to trade around $60 per barrel for some time, well below the levels seen amid the boom in the industry which ended last year.

The fall in the oil price since June last year took a heavy toll on BP’s third quarter profits.

The company has been slashing spending on new projects and running costs in response to it.

BP said it aims to cut annual cash costs by a further $3bn by 2017, with implications for jobs, but did not give any guidance on whether this will impact on North Sea staffing.

It has shed 300 jobs in the UK North Sea this year under the cost reduction drive. With other oil and gas firms and services companies following suit some 5,500 jobs have been lost across the UK supply chain.

Mr 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.”

The US executive said BP’s priority was to sustain its dividend and then grow payouts to shareholders over the long term.

But the company will continue investing heavily in big fields it is developing West of Shetland such as Clair Ridge. BP has noted the potential profitability of such developments, whose scale allows operating costs to be spread over many barrels.

In a presentation to analysts yesterday the company forecast the North Sea will be the company’s second biggest generator of cash from production in 2020, after the Gulf of Mexico.

BP said it will drill on 10 North Sea hubs after 2020, while exploration will continue.

In the key events section for the exploration and production arm in the third quarter results, BP notes its success in winning five new North Sea blocks in the latest UK licensing round, in July.

The company also classes Maersk Oil winning regulatory approval for plans to develop the giant Culzean field in the UK North Sea as a key event. BP has a 16 per cent stake in Culzean.

The other key events related to the firm starting production on a field off Australia and winning exploration licences off Egypt.

The decision to draw attention to UK activity will likely be welcomed as a sign BP has not lost its enthusiasm for the area following the plunge in the crude price, from $115 per barrel in June last year to around $47/bbl.

There have been fears majors will abandon the area.

BP reduced its presence in the North Sea by offloading stakes in non core fields before the oil price plunge as it looked to raise funds to cover the cost of the disastrous spill on the company’s acreage in the Gulf of Mexico in 2010.

The costs of the spill increased by $426m in the third quarter, to $55bn in total. BP has reached agreements in principle with the US federal government and five Gulf states to settle all outstanding federal and state claims arising from the Deepwater Horizon oil spill.

BP’s sober assessment of the outlook for crude prices underlines the scale of the challenge facing firms in the UK North Sea, where costs spiralled during the boom years.

Trade body Oil & Gas UK has also said the industry needs to plan for an era of $60 Brent.

Analysts at Barclays said BP appeared to be making progress in resetting its business against a challenging backdrop.

“It is encouraging that the cost saving programme now appears to be making a meaningful impact on the company results,” they wrote.

BP made $1.8bn underlying profit in the third quarter net of one offs, down 40 per cent, $1.2bn, on the $3bn it achieved in the same period last year.

Analysts had expected it to make around $1.2bn.

Profits in the upstream exploration and production arm plunged to $0.8bn from $3.9bn.

However, BP was helped from a strong performance from its refining and marketing arm, in which profit margins were boosted by the oil price fall. Downstream profits increased to $2.3bn from $1.5bn in the third quarter of 2014.

The company said it now expects capital investment in new projects to total $19bn this year. It had expected to spend $24bn to $26bn a year ago and under $20 billion in the second quarter.

BP cut cash costs by $3bn in the first three quarters of this year, compared to 2014.

The company announced a quarterly dividend of 10 cents per ordinary share, up from 9.75 cents in the same period of 2014.

Shares in BP closed down 4.4p at 380p.