BP has announced plans to lower the amount it spends and suspend share buy backs as it focuses on growing a lean oil and gas business.
Announcing its fourth quarter results for 2025,BP also set out metrics aimed to quell critics as it focuses on reversing lagging performance relative to its peers and its former strategy aimed it reducing production and investing in clean energy.
It hailed its progress on capital discipline confirming a 10%reduction in capex compared with 2024 and over$11bn of divestments–more than halfway to its$20bn target for 2027 including its sale of a 65%stake in its Castrol business and the completion the sale of its stake in the Culzean gas field in the North Sea to NEO Next.
Hailing its track record up start ups–including Murlach in the North Sea–as well as discoveries,it noted a boost in replacement ration to 90%up from 55%.Early estimates on its August 2025 exploration discovery in the Bumerangue block offshore Brazil said there could be around 8 billion barrels of liquids in place,albeit noting there is a“wide range of uncertainty around this estimate”.
The firm has also upped its target on its cost cutting efforts.Having booked$6bn on the sale of the Castrol stake,it will now aim for$5.5-$6bn of cost reductions by 2027,instead of$4-$5bn set previously by former CEO Murray Auchincloss.
Total underlying replacement cost(RC)profit–BP’s preferred measure of profitability–was$7.5bn for full year compared to$8.9bn in 2024.
Underlying RC profit for the quarter was$1.5 billion,compared with$2.2 billion for the previous quarter.
Prior to its Q4 results,BP warned it would announce up to$5bn of write downs,particularly in its gas and low carbon energy division–its former driver of green renewable energy.
Taking these into account,reporting impairments of around$4 billion,BP’s reported loss for the quarter was$3.4bn,compared with a profit of$1.2bnfor the third quarter 2025.
Interim chief executive officer Carol Howle led the annual results as the firm awaits the arrival of its new chief executive,Meg O’Neill,in April.Before taking on her current role,Howle was head of supply,trading and shipping.
She said:”2025 was a year of strong underlying financial results,strong operational performance,and meaningful strategic progress.We have made progress against our four primary targets–growing cash flow and returns,reducing costs,and strengthening the balance sheet–but know there is more work to be done,and we are clear on the urgency to deliver.
“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.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.
“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.
“We look forward to Meg O’Neill joining as CEO in April as we accelerate our progress to build a simpler,stronger and more valuable bp for the future.We are in action and we can and will do better for our shareholders.”
