By Justin Scheck and Ian Walker

LONDON-- BP PLC on Tuesday became the first of the world's giant oil companies to record a quarterly loss in the recent oil-price swoon, largely the result of accounting losses because of the diminished value of some of its reserves.

BP posted a replacement-cost loss--a figure that strips out inventory changes and is similar to the net income that U.S. companies report--of $969 million for the fourth quarter, compared with a profit of $1.51 billion in the same period last year.

However, BP shares rose 4% in early London trading because BP's underlying earnings--which factor out one-time items such as write downs--exceeded analysts' expectations. The company also announced an increased dividend, to 10 cents a share from 9.75 cents, and its Rosneft OAO holdings showed positive earnings, largely because of an accounting change.

Still, BP said it was grappling with a new landscape of low oil prices. In response, the company said it would slash spending on new projects in 2015, following the path of other major oil companies such as Chevron Corp. and Royal Dutch Shell PLC.

"We have now entered a new and challenging phase of low oil prices through the near and medium term," BP Chief Executive Bob Dudley said in a prepared statement. He said he is "resetting" the company "for the new reality of lower prices."

While there has been widespread pain across the big oil producers as the price for benchmark Brent crude dropped by more than half since mid-June, BP showed a more profound impact. It lowered the value of reserves in places such as the North Sea and Angola, and its cautionary tone contrasted with the message rival Shell sent last week when its CEO spoke of an expected recovery in oil prices.

Against this backdrop, BP said it plans to reduce exploration expenditure and postpone marginal projects at its upstream division, and not advance selected projects in downstream and other areas. As a result, BP said it expects organic capital expenditure in 2015 to total around $20 billion, significantly lower than its previous guidance of $24 billion to $26 billion.

For the full year, BP reported a replacement-cost profit of $8.07 billion, compared with $23.61 billion for 2013. BP's net loss of the quarter was $4.41 billion, compared with a profit of $1.04 billion in the same period last year, on revenue down 21% to $74 billion. Net profit for the year fell to $3.78 billion from $23.45 billion, on revenue down 6.7% to $353.57 billion.

The company's downbeat earnings come after global oil prices have fallen more than 50% since June, to less than $50 late last month. But BP's earnings only capture a portion of the decline, since much of it happened after the quarter closed; the price for benchmark Brent crude averaged about $77 a barrel in the fourth quarter.

Analysts said the market's positive reaction to the news had several explanations.

BP recorded a $451 million replacement-cost profit before tax and interest from its near-20% holding in Kremlin-controlled OAO Rosneft, which investors and analysts widely expected to lose money. Rosneft's performance, a BP spokesman said, was partly the result of changes in how Rosneft accounts for foreign currency. "It's all about their ruble hedging," the spokesman said.

That surprising Rosneft performance explains why BP's overall earnings for the quarter exceeded many analysts' expectations, said Santander analyst Jason Kenney. Understanding Rosneft is "a black box exercise" for BP investors, he said. Minus the Rosneft surprise, he said, BP's exploration-and-production performance was slightly below most analysts' forecasts.

Another positive was BP decision to raise its dividend, in contrast with Shell, which last week froze its payout to shareholders at current levels.

BP has shrunk since the 2010 Deepwater Horizon explosion and spill in the Gulf of Mexico, selling more than $40 billion in assets to pay for legal and cleanup costs.

The sales reduced BP's production by about 25% between the spill and the end of 2013, but the company said in December that its head count rose over that period. BP said it would book a $1 billion restructuring charge as it tries to cut costs through layoffs and other measures.

BP is also facing a potential $13.7 billion payment in a continuing trial in a Louisiana federal court to determine penalties for the Gulf spill.

BP's production, including Rosneft, fell slightly for the fourth quarter to 3.21 million barrels of oil equivalent a day, from 3.23 million barrels for the fourth quarter of 2013. For the full year, BP said it produced 3.15 million barrels a day, down from 3.23 million a year earlier.

However, the oil major said it expects reported production for 2015 to be higher than 2014, with underlying production "broadly flat" compared with 2014.

"We expect first-quarter 2015 reported production to be higher than the fourth quarter, mainly reflecting higher entitlements in PSA regions on the basis of assumed lower oil prices," BP said.

Write to Justin Scheck at justin.scheck@wsj.com and Ian Walker at ian.walker@wsj.com

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