By Rory Gallivan 

LONDON-- BP PLC expects to book $1 billion in restructuring charges over the next year as it simplifies its operations and corporate activities.

The oil major on Wednesday said it would incur the costs over the next five quarters, including the current quarter, as part of a broader group-wide program to simplify its upstream and downstream activities and corporate functions.

The company said details of the charges and further guidance on the program would be given with each quarter's results.

"The simplification work we have already done is serving us well as we face the tougher external environment," Chief Executive Bob Dudley said. "We continue to seek opportunities to eliminate duplication and stop unnecessary activity that is not fully aligned with the group's strategy."

BP, which has sold more than $40 billion of assets since the 2010 Deepwater Horizon disaster, had already said it would cut staff to reflect the company's smaller size. However, Wednesday's announcement puts a price tag on that effort and shows that even moves to save money can cut into profit in the short term.

The restructuring comes amid fast-falling oil prices and a number of moves by big and small oil companies to reduce costs and scale down capital spending. Earlier this week, Conoco said it would sharply reduce its capital spending. BP also warned investors earlier this year that it would scale back its own capital spending next year by $1 billion to $2 billion. Before that planned cut, BP had estimated it would spend between $24 billion and $26 billion next year.

In its statement Wednesday, BP said falling oil prices and its own streamlining efforts, in light of the big asset divestitures, "would be expected to further help BP align its cost base with its smaller footprint and reduced activity levels."

Amid falling prices, BP said about a third of its exploration and development projects are operated as production-sharing contracts--insulating it somewhat from lower prices. It also cited its natural gas projects, which are "typically less sensitive to oil price movements." It repeated that its projects are approved on the assumption of $80 a barrel oil, but added Wednesday that it also tests each project at $60 a barrel to "understand the resilience of the portfolio at a range of prices." International benchmark oil has been trading in recent days just above $65 a barrel.

Write to Rory Gallivan at rory.gallivan@wsj.com

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