BP has reported a 16% drop in annual profits after the collapse of wholesale oil prices through the end of 2025.
The company, which is awaiting the arrival of a new chief executive in April amid a renewed campaign for oil and gas earnings, reported a net profit of $7.5bn (£5.5bn).
BP said it had made progress on its four main objectives, which include increasing cash flow and reducing costs, but was further along.
It suspended share buybacks to help unlock more cash for oil and gas opportunities.
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Interim chief executive Carol Hawley told investors, “With capital discipline and a continued emphasis on returns, we are reducing capital expenditure to the lower end of the guidance range for 2026, while continuing to reduce our cost base.
“We are also taking decisive actions to upgrade our portfolio and strengthen our company, including the execution of our $20 billion disposal programme and the decision to suspend share buybacks and fully allocate excess cash to our balance sheet.
“These decisions position us to make progress in long-term value growth through the unique opportunity set we are creating in our upstream business, including the Boomerang discovery in Brazil, where our early estimates indicate approximately 8 billion barrels of liquids.”
Shares of BP – up 10% so far this year – were down more than 3.5% before markets opened on Tuesday.
The company is focusing on maximising more attractive oil and gas opportunities at the expense of investments in renewable energy.
BP pursued options under the leadership of Bernard Looney, but he left under a cloud in 2023 over revelations of relations with BP colleagues.
Murray Auchincloss was removed as CEO in December. Photo: AP
The company changed its stance under pressure from major investors as BP’s share price lagged far behind the growth seen by all its major rivals, including Shell.
Murray Auchincloss, the architect of the return to fossil fuels, was shown the door in December – the first major move by BP’s new chairman, Albert Manifold, amid continuing shareholder frustration over the progress of BP’s turnaround.
Meg O’Neill The head of Australia’s Woodside Energy from 2021 is to succeed him in April as the board looks to build on recent progress in reclaiming investor value.
Meg O’Neill. Photo: BP
However, at the same time there continues to be a debate among BP’s shareholders for a more balanced approach to investing in the energy future on both climate and demand grounds.
Environment-focused shareholder lobby group Follow This argued that BP’s earnings figures show it is on the wrong track.
Its chief executive, Mark Van Baal, said, “BP is in serious trouble as the company continues to drift without strategic direction.
“After a half-hearted energy transition, the company is now doubling down on fossil fuels in a market that will soon begin to shrink.
if BP can make a profit.
and restore its dividend, how will the company create shareholder value in a falling market?”
