BP's second quarter profits have been hit by a $9.8 billion (£6.3 billion) charge over the 2010 Deepwater Horizon disaster.
The company said its underlying replacement cost profit, defined as its net income, was $1.3 billion. This fell short of estimates for $1.64 billion and behind the $3.6 billion it reported last year.
The result also reflected the impact of the low oil and gas prices, a reduced contribution from its stake in Russia's Rosneft, and one-off charges arising from circumstances in Libya, the company said in a statement.
Oil prices have slid since reaching a peak of $115 dollar a barrel last June as a result of a global supply glut. Brent crude was earlier down 32 cents at $53.15, having been below $53.
The London-listed firm lowered its expectations for full-year capital spending to below $20 billion having already slashed investment by 13% earlier this year in the wake of the price slump.
The dividend was maintained at 10 cents per share.
Bob Dudley, BP's chief executive, said: “The external environment remains challenging, but BP moved quickly in response and we continue to do so.
Shares in BP were up almost 0.8% at 390.05p in early trading.
Earlier this month BP reached a record $18.7 billion settlement with the US government and five US states over damages claims relating to the massive oil spill at its Deepwater Horizon rig five years ago.
An explosion during drilling at its Macondo prospect killed 11 workers and sent around 5 million barrels of oil flooding into the Gulf of Mexico, making it the worst such event to ever take place in US waters.
Additional reporting by Reuters