"Costs have got out of control, we need costs to come right down," he told BBC 5 live's Wake Up to Money programme.
Lord Browne said companies would have to "slim down", warning "there will be some companies that go to the wall".
The warning from Lord Browne, who led BP for 12 years, comes amid fears the industry is in crisis.
A barrel of Brent crude has more than halved in price since its peak of $115 last summer. On Tuesday, the price stood at $57 a barrel.
Last month, the chairman of the independent explorers' association Brindex told the BBC the industry was "close to collapse".
Robin Allan claimed almost no new projects in the North Sea were profitable with oil below $60 a barrel.
In recent weeks hundreds of North Sea jobs have been cut by oil firms, including BP and Talisman Sinopec.
The chancellor has said he will look at new measures to support the industry in his next Budget in March.
Both industry leaders and the Scottish government are calling for taxes to be cut further as a matter of urgency to help the sector deal with falling oil prices and higher costs.
Unions have also raised safety concerns over the number of job cuts being made in the industry.

The number eight made his comeback from a knee injury last weekend, and is included in a 24-man training party to prepare for the Calcutta Cup match.
Vunipola has been lined up to replace Nathan Hughes in the starting XV.
Scrum half Ben Youngs, wing Jack Nowell and centre Jonathan Joseph are also poised for returns to the backline.
Vunipola made his comeback ahead of schedule for his club Saracens on Sunday, after three months out with ligament damage.
And England head coach Eddie Jones appears set to bring him back at the first time of asking, after England's training plans on Tuesday showed Vunipola would start in the back row.
Bath centre Joseph, who was left out of the squad that beat Italy, is set to replace Ben Te'o at outside centre, while it's likely Youngs will be preferred to Danny Care, with Nowell edging out Jonny May.
England will confirm their starting XV and replacements on Thursday morning.
Jones' side lead the Six Nations table with three wins from their three matches.
Forwards (13)
Dan Cole (Leicester Tigers)
Jamie George (Saracens)
Dylan Hartley (Northampton Saints)
James Haskell (Wasps)
Nathan Hughes (Wasps)
Maro Itoje (Saracens)
Joe Launchbury (Wasps)
Courtney Lawes (Northampton Saints)
Joe Marler (Harlequins)
Kyle Sinckler (Harlequins)
Billy Vunipola (Saracens)
Mako Vunipola (Saracens)
Tom Wood (Northampton Saints)
Backs (11)
Mike Brown (Harlequins)
Danny Care (Harlequins)
Elliot Daly (Wasps)
Owen Farrell (Saracens)
George Ford (Bath Rugby)
Jonathan Joseph (Bath Rugby)
Jonny May (Gloucester Rugby)
Jack Nowell (Exeter Chiefs)
Ben Te'o (Worcester Warriors)
Anthony Watson (Bath Rugby)
Ben Youngs (Leicester Tigers)

Jim McCafferty, 70, from Raby Street, south Belfast, is accused of offences alleged to have taken place between 2011 and 2014, when the alleged victim was between 13 and 16 years old.
Mr McCafferty is originally from Scotland.
A defence solicitor said he would not apply for bail because of concerns over the defendant's safety.
The judge remanded Mr McCafferty back into custody. He will appear in court again in January.
The defendant worked for several football clubs during the 1980s and 90s as a scout, kitman and youth coach.
The clubs included Celtic, Hibernian and Falkirk.
Mr McCafferty moved to Northern Ireland seven years ago.
Former BP chief executive Lord Browne has warned North Sea oil operators' costs must fall in order for them to compete globally.
[NEXT_CONCEPT]
Billy Vunipola will feature against Scotland in the Six Nations on Saturday, after being confirmed in England's matchday squad.
[NEXT_CONCEPT]
A former Celtic FC youth coach has appeared in a court in Belfast charged with sexual activity with a child.