BP boss warns of severe impact on North Sea oil from ongoing supply glut

The North Sea oil industry is in for a "massive" shock as the global supply glut worsens, according to the chief executive of oil major BP.

“We’re going to see massive restructuring," Bob Dudley said at the CERAWeek energy conference in Houston on Tuesday.

“The North Sea is a very high-cost basin and it is going to be a painful adjustment.”

He said that the measures announced in the recent UK budget to lower taxes for North Sea producers will help to support companies' margins, but smaller groups would still be hit hard.

Dudley warned that the current oversupply of crude - given ongoing record drilling volumes of shale in the US and a potential surge of supply from Iran - could have "unintended consequences for the world in terms of stress".

Speaking of BP's own position, he highlighted that the company had been able to divest $40bn of assets before prices plummeted.

"This has reduced risk and left us in a better position to weather the storm facing our industry. We are making some very tough decisions,” he said.