BP PLC shares slumped in Tuesday morning's trade, losing 5.6%, after it ditched a key part of its proposition to shareholders.
The FTSE 100-listed 'big oil' firm today announced it has decided to suspend share buybacks and redirect “excess cash” towards its balance sheet, after reporting a US$3.4bn fourth-quarter loss, even as the company pointed to US$1.5bn of underlying replacement cost profit for the period.
The fourth quarter was weighed down by inventory holding losses and a net adverse post-tax impact of adjusting items of US$4.3bn, including around US$4bn of post-tax net impairments largely tied to transition-related assets in its gas & low carbon energy segment.
BP said underlying RC profit fell from US$2.2bn in the third quarter as upstream realisations softened and downstream performance was hit by refinery turnarounds and temporary capacity disruption. For the full year, BP reported US$7.5bn of underlying RC profit on US$24.5bn of operating cash flow, ending 2025 with net debt of US$22.2bn.
"With a continued emphasis on capital discipline and returns, we are reducing capital expenditure for 2026 to the lower end of the guidance range, while continuing to drive down our cost base," said interim chief executive Carol Howle.
"We are also taking decisive action to high-grade our portfolio and strengthen our company, including the execution of our $20bn disposal programme and the decision to suspend the share buyback and fully allocate excess cash to our balance sheet."
Howle described 2025 as "a year of strong underlying financial results, strong operational performance, and meaningful strategic progress.”
Management set a US$13–13.5bn capital expenditure budget for 2026 and reiterated a US$14–18bn net debt target by end-2027, while continuing with its disposal programme, including the planned sale of a majority stake in Castrol.
BP also highlighted the Bumerangue discovery offshore Brazil, where initial estimates “indicate around 8 billion barrels of liquids in place,” and highlighted that it expects Meg O’Neill to join as CEO in April.
In London, BP shares dropped 5.6% changing hands at 450.5p