FILE PHOTO: BP's new Chief Executive Bernard Looney speaks during a Q&A in central London, Britain February 12, 2020. REUTERS/Toby Melville

LONDON (Reuters) - BP BP.L seeks to sharply reduce its spending and costs to be able to generate profit at oil prices below $35 a barrel by next year compared with $56 a barrel last year, CEO Bernard Looney said.

The company announced a 25% cut in its 2020 spending to $12 billion following the recent collapse in oil prices and could reduce its budget by a further $1-2 billion, Looney told Reuters.

The company expects global oil demand to drop by around 15 million barrels per day in the second quarter due to coronavirus-related movement restrictions, roughly 15% of 2019 consumption, Looney said.

“We’re in this for quite some time,” Looney said.

BP on Tuesday reported a two-thirds drop in first-quarter profit and a sharp rise in debt.