OREANDA-NEWS. BP chief executive Bob Dudley has played down concerns that the firm's dividends may not be sustainable if oil prices stay lower for longer. But he said the firm may have to take on more debt or tap its cash reserves to maintain shareholder payouts, at least in the short term.

"There is a lot of leverage that you have: capital expenditure, costs, your own profitability. The one people forget about is the balance sheet. We have a gearing level — last quarter — of 18pc. So, we have got a lot of flexibility there, and we remain committed to the dividend," Dudley told Argus.

BP and the industry as a whole have been making headway on bringing down cost structures to adapt to lower oil prices, and Dudley expects further progress next year.

"What we are seeing now is a re-basing of the industry itself. Costs are coming down, projects being deferred until they are less costly. We are going through a re-adjustment phase in the entire industry," he said. "I think this is going to be a characteristic of the industry for next year."

Job cuts have been one of the key drivers of operating cost reductions this year, and BP is expected to shed more light on its own headcount reductions at its third-quarter results on 27 October. But the oil industry should avoid cutting too much, Dudley said.

"We are going to be very careful. There was a period for a long time when people did not come into the industry. I think we have moved through that period now, but we need to make sure that we preserve really great talent for the future at a time when clearly the cost structures have to come down. I think the industry knows how to do that," Dudley said.