"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.
Former BP chief executive Lord Browne has warned North Sea oil operators' costs must fall in order for them to compete globally.