"I do think the industry needs to prepare for lower for longer," Bob Dudley said from the IHS CERAWeek energy conference in Houston.
Despite a slight recovery in recent sessions, global crude prices sit 40 percent lower than a year ago. The commodity lost ground again Tuesday, as West Texas Intermediate futures settled nearly 2 percent lower at $55.26 per barrel.
For Dudley, prices could linger at these levels for "several years." He believes U.S. production will continue to increase even as oil companies reduce the number of active rigs.
Companies need to figure out how to stay profitable as they work through cheaper oil and tighter drilling regulations, Dudley added.
"I'm sure the industry will work through it," he said.
BP has been "completely transformed" since the Deepwater Horizon oil spill in the Gulf of Mexico five years ago Monday, Dudley said. Standards in the area have become stricter since the disaster, and the broader oil industry needs to change its practices to fit global developments, he said.
Dudley added that even as industry struggles have fueled speculation about mergers, "we have not had conversations" about making an acquisition or being bought.