More than £3.3 billion was wiped off the value of BP yesterday after the oil company’s chief executive said that revenues were set to plunge.

Tony Hayward, who took the helm at BP in May, told company executives in the United States that production and refining problems would mean that third-quarter revenues would be “dreadful”.

Despite problems such as a production shutdown in Alaska and delays to new oilfields being well documented, the stock market was spooked by Mr Hayward’s frank assessment of their short-term damage. BP’s share price fell 17p to 572½p and is now 20 per cent off the peak that it hit last April before many of the problems came to light. The predicted poor performance in the third quarter comes after a 12.5 per cent decline in BP’s profits, to $5.3 billion (£2.6 billion) during the second quarter.

Mr Hayward also presented a plan during the “town hall” meeting in Houston, Texas, that he hopes will improve the fortunes of Britain’s biggest company. His comments to executives were circulated within the company and made public yesterday.

However, a BP spokesman insisted that Mr Hayward’s remarks about “dreadful” third-quarter results related to “operational” performance, and not revenues.

Mr Hayward said that BP planned to simplify the business by cutting the number of layers of management between workers and the chief executive from 11 to seven. “There is massive duplication and lack of clarity of who does what,” he was quoted as saying. He added that BP needed to change its internal culture and become less risk-averse: “Assurance is killing us.”

BP has faced a barrage of bad news, including losing Lord Browne of Madingley, the former chief executive, after he misled a court over his personal life. Three of BP’s five US refineries are either not fully operational or production has been suspended.

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