BP has signalled more cost cutting is in prospect at the company as it braces for a long period of low oil prices after suffering a 45 per cent fall in second quarter profits.

The oil and gas giant made $720 million underlying profit in the three months to June against $1.3 billion in the same period last year as the oil price slump took a heavy toll on earnings.

BP has cut hundreds of jobs in the North Sea since the crude price started tumbling in 2014.

The company lost $2.2bn overall in the second quarter after writing off a further $5.2bn to cover the expected cost of the disastrous Gulf of Mexico spill in 2010.

The charge reflects what BP reckons is a reliable estimate of the cost of meeting the multitude of claims related to the Deepwater Horizon incident.

Chief executive Bon Dudley said: “We are very pleased to have finally drawn a line under the material liabilities for Deepwater Horizon.”

He said BP was making good progress with efforts to get in shape to prosper in what the company expects will remain a challenging environment.

“Our relentless group-wide focus on capital and cost discipline is helping BP to become much more efficient while maintaining the investment needed for future growth,” said Mr Dudley.

BP has slashed capital spending on new projects and cut thousands of jobs worldwide amid the downturn in the industry triggered by the crude price fall.

However, chief financial officer Brian Gilvary indicated there could be more pain to come.

“We continue to reset our capital and cost base and are moving steadily towards our aim of rebalancing organic sources and uses of cash by 2017 in a $50-55 per barrel oil price range,” he said.

The comments suggest BP expects the partial recovery in crude prices seen this year to be maintained, in spite of concern about the potential fallout from the Brexit vote in the UK.

Brent crude traded at around $44 per barrel yesterday compared with the seven year low of $27/bbl reached in January.

But BP seems to see little prospect of the crude price returning to the $100 per barrel plus levels that sustained a long boom in investment in the North Sea.

This came crashing to a halt after the crude price fell from the peak of $115/bbl reached in June 2014, as growth in global production ran well ahead of muted demand.

While BP gave no indication of where it might make further cost cuts, the directors' remarks will likely stoke concern about the prospects for the business in the North Sea. Giants have claimed the costs of operating in the area are too high.

BP has been focusing investment on a small number of giant new fields in areas such as West of Shetland. It expects to be able to use modern production technology to boost returns from these.

The firm has been working hard to try to increase the profitability of other North Sea operations.

In January the company announced plans to cut 600 North jobs over two years citing toughening industry conditions.

It had around 3,000 people working for it in the North Sea at the time, including staff and contractors.

BP shed 300 North Sea jobs in January last year.

Mr Gilvary emphasised the importance that BP attaches to maintaining dividend payments to investors.

The company held the second quarter dividend at 10 cents per share.

David Elmes of Warwick Business School noted: “BP and its peers face a 'lower for longer' challenge with oil prices taking longer to recover from the drop that started in 2014 than we’ve seen in previous falls in oil prices. It’s forcing them to keep on cutting costs and borrow money to pay dividends.”

Royal Dutch Shell will announce second quarter results on Thursday. The company has shed around 1,000 North Sea jobs amid the crude price plunge.

Around 200 people employed by the Wood Group engineering firm on Shell platforms staged a strike yesterday against plans to cut pay and allowances.

BP’s second quarter results highlight how tough trading conditions have been. BP’s exploration and production division lost $109m net of one offs, compared with a $228m profit in the same period last year.

The refining and marketing division made $1.4bn profit against $1.6bn last time. BP noted it achieved “significantly lower refining margins”.

BP increased its estimate of the total cost of the Gulf of Mexico oil spill to $61.6bn before tax in the quarter, based on what it believes to be reliable updated estimates of the costs of settling the related claims.

First half underlying profit fell to $1.2bn from $3.9bn.

Shares in BP closed down 5.75p, at 434.6p.