BP, Europe's second-biggest oil company, reported first-quarter profit that beat analysts' estimates as earnings from refining and trading offset lower crude prices.

Profit adjusted for one-time items and inventory changes dropped 19 per cent from a year earlier to $2.6 billion from a year earlier, the London-based company said in a statement on Tuesday. That beat the $1.2 billion average forecast of 12 analysts surveyed by Bloomberg.

Chief executive Bob Dudley is setting the company up for a longer period of low oil prices by slashing spending, reviewing new projects and selling assets.

Profit margins from refineries rose in the first quarter as the drop in oil prices boosted global demand for gasoline and other fuels.

“We are resetting and rebalancing BP to meet the challenges of a possible period of sustained lower prices,” Mr Dudley said in the statement.

Brent crude, a benchmark for more than half the world’s oil, has dropped more than 40 per cent in the past year. This has eroded value and forced companies to reduce spending on high- cost project as they struggle for revenue.

The expenditure cuts have driven oil up about 16 per cent this month.

BP said in February it expects capital expenditure this year to be $20 billion, lower than an earlier forecast of at least $24 billion. It spent about $23 billion in 2014.

It's joining Chevron and Royal Dutch Shell in selling non-drilling infrastructure to raise funds.

The company has offloaded more than $7 billion of assets in a $10 billion sale programme planned for 2014 and 2015.

BP on April 23rd announced it agreed to sell its stake in a natural-gas transportation system in the North Sea to Antin Infrastructure Partners for £324 million.

The company is also seeking buyers for as much as $2 billion of US pipelines and storage terminals, people familiar with the matter said this month.

Bloomberg