BP has put share buybacks on hold and upped its cost savings target as it revealed sharply lower annual profits after steep falls in the cost of crude.
The FTSE 100 oil giant reported a 16% fall in underlying replacement cost profits – the company’s preferred earnings measure – to 7.49 billion US dollars (£5.47 billion) for 2025, down from 8.92 billion dollars (£6.52 billion) in 2024.
It came after fourth-quarter earnings fell 30% quarter-on-quarter in the last three months of the year, to 1.54 billion dollars (£1.12 billion), though this was 32% higher than a year earlier and in line with expectations.
The group said it was now targeting cost savings of 5.5 billion dollars to 6.5 billion dollars (£4.02 billion to £4.75 billion) by the end of next year, up from a previous target of up to 5 billion dollars (£3.65 billion).
In a blow to investors, it said it was suspending its share buyback programme “to accelerate strengthening” of its balance sheet.
It comes after a year of turmoil for the oil major, which came under pressure from activist investor Elliott Investment Management and saw Murray Auchincloss step down as chief executive after less than two years in the role.
Woodside Energy boss Meg O’Neill has been appointed to replace him and will start in the role on April 1.
Carol Howle, who is taking the helm on an interim basis, said: “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 20 billion dollar disposal programme and the decision to suspend the share buyback and fully allocate excess cash to our balance sheet.”
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