BP on Tuesday became the latest energy giant to say it would slash investment this year as tumbling oil prices cut into the group's profits.
British company BP said spending in 2015 was expected to total about $20 billion (17.6 billion euros), down from a previous guidance of $24-26 billion.
"We have now entered a new and challenging phase of low oil prices through the near and medium term," BP chief executive Bob Dudley said in a group earnings statement.
"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."
BP said underlying replacement cost profit -- a measure of earnings watched by the market -- dropped almost 10 percent to $12.1 billion in 2014 compared with a year earlier.
BP booked a $3.6-billion net charge in the fourth quarter, which it said reflected "the impact of the near-term lower oil price environment, revisions to reserves and other factors".
As a result it reported a replacement cost loss of $969 million for the final three months of last year.
BP's annual net profit tumbled to $3.78 billion from $23.45 billion in 2013 but the figure was skewed by a huge one-off gain the previous year earned from the sale of its interest in joint venture TNK-BP to Russia's Rosneft.
Energy giants are slashing spending and cutting jobs following a plunge in oil prices since June.
BP last week said it was freezing global salaries following the sharp drop and recently announced it was axing 300 jobs in the North Sea. In December, it took a restructuring charge totalling about $1.0 billion in an overhaul of the business.
Rival Royal Dutch Shell last week unveiled plans to slash spending by more than $15 billion after posting lower annual profits on tumbling oil prices. And US groups Chevron and ConocoPhillips have cut drilling budgets.
World oil prices have lost as much as 60 percent of their value since June, largely owing to a surge in global reserves boosted by robust US production from shale rock.
The problem was exacerbated in November after the OPEC oil cartel said it would maintain output levels. The 12-nation group, which pumps about 30 percent of the world's oil, is bidding to keep market share faced with a surge in US output.