BP chief predicts 3 years of low oil prices as firms slash 2015 budgets

The chief executive of BP has said oil prices could stay low for as long as three years.

Bob Dudley told the BBC that the oil major was planning for depressed oil prices for years and that petrol prices in the UK could fall below the £1 a litre mark.

Crude oil prices have fallen by around 55% since last summer, falling below $50 a barrel in January.

"Companies like us, at BP, we're going to need to rebase the company based on no guarantees at all that the price will come back up," he told the BBC at the World Economic Forum in Davos.

"We have to plan on this [price] being down, and we don't know exactly what level, but certainly a year, I think probably two and maybe three years."

A prolonged period of low oil prices would place significant strain on oil producing countries, whose governments rely on export revenues to fund state budgets, as well as private oil companies.

BP and the global oil industry as a whole would likely see "significant workforce reductions," Dudley said.

Billions of dollars of oil projects have already been scrapped, as companies slash exploration and development budgets.

The rapid decline in oil prices could deter investment throughout the entire energy sector, the head of the International Energy Agency warned on Wednesday (21 January).

"There is a reluctance for investments in energy projects in general," said Maria van der Hoeven, executive director at the IEA. "We can see it everywhere. If these low oil prices delay investment, or investment decisions, the world will be in a problematic situation in the next decade."

Meanwhile, IEA's chief economist told the World Economic Forum that crude oil prices would push higher in the second half of 2015.