BP PLC on Tuesday said it is suspending its share buyback programme, saying excess cash will be used instead to reduce debt to create a ‘strong platform’ from which to invest in its ‘distinctive deep hopper of oil and gas opportunities’.
Also to pay down debt, the London-based oil major will reduce capital expenditure in 2026, cut operating costs, and pursue its $20 billion disposal programme.
BP shares were down 5.6% to 451.10 pence early Tuesday in London. The wide FTSE 100 index was down just 0.3%.
Net debt stood at $22.18 billion on December 31, down from $26.05 billion at the end of the September but down by less from $23.0 billion a year before. BP on Tuesday said it is maintaining its target for $14 billion to $18 billion net debt by the end of 2027.
Meanwhile, capital expenditure was $14.53 billion in 2025, down from $16.24 billion in 2024, and BP plans to cut this further to $13.0 billion to $13.5 billion in 2026.
Despite its plans to pause share buybacks, BP declared a higher cash dividend. It will pay a fourth-quarter dividend of 8.32 US cents, unchanged from the third quarter but up from 8.00 cents a year before. For all of 2025, BP is paying out 32.96 cents, up 5.4% from 31.27 cents in 2024.
For 2025, BP reported underlying replacement cost profit of $7.49 billion, down 16% from $8.92 billion, while unadjusted replacement cost profit was $1.07 billion for the year, up from $750 million in 2024. Profit attributable to shareholders dropped to just $55 million in 2025 from $381 million in 2024.
In the fourth quarter alone, underlying replacement cost profit rose by 32% to $1.54 billion from $1.17 billion, but BP recorded an unadjusted replacement cost loss of $2.76 billion, wider than $1.95 billion a year earlier, and a $3.42 billion loss attributable to shareholders, widened from a $1.96 billion loss in the prior year.
For 2026, BP said it expects upstream production to be slightly lower than in 2025, when it was 2.31 million barrels of oil equivalent per day, down from 2.36 million in 2024. It guided for broadly flat first-quarter upstream output relative to the 2.34 million barrels of oil equivalent per day delivered in the fourth quarter.
In the customers division, BP said it expects seasonally lower volumes in its in the first quarter. In products, it expects lower industry refining margins versus the fourth quarter.
‘We are also taking decisive action to high-grade our portfolio and strengthen our company, including the execution of our $20 billion disposal programme and the decision to suspend the share buyback and fully allocate excess cash to our balance sheet,’ Interim Chief Executive Officer Carol Howle said.
‘These decisions position us to progress long term value growth through the distinctive opportunity set we are creating in our upstream business, including the Bumerangue discovery in Brazil, where our initial estimates indicate around 8 billion barrels of liquids in place.’
Meg O’Neill will join in April as CEO, the former Woodside Energy Group Ltd replacing Murray Auchincloss, who departed in December.
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