BP will continue to distribute cash through dividends, declaring a fourth-quarter payout of 8.320 cents per ordinary share. Interim Chief Executive Officer Carol Howle called 2025 “a year of strong underlying financial results” and emphasized the need to accelerate efforts to grow cash flow, cut costs and lower debt.
Key Financial Metrics
Despite the decision to halt repurchases, several indicators showed incremental improvement:
- Fourth-quarter net debt fell to $22.18 billion, down from roughly $23 billion a year earlier.
- Operating cash flow for the quarter rose to $7.6 billion, compared with $7.43 billion in the prior-year period.
- Capital expenditure for 2026 is budgeted at $13 billion to $13.5 billion, the lower end of the company’s previously stated range.
Shares reacted negatively to the buyback suspension, falling 5.4 percent in morning trading and ranking among the steepest decliners on the pan-European Stoxx 600 index.
Leadership Transition
BP’s leadership will change on Apr. 1, when Woodside Energy chief executive Meg O’Neill is scheduled to succeed Murray Auchincloss, who announced his departure late last year. Howle, who has served as interim CEO during the transition, will return to her prior executive role once O’Neill takes charge.
Industry Backdrop
European oil and gas producers have entered 2026 grappling with the steepest annual crude-price decline since the early stages of the Covid-19 pandemic. Concerns about global oversupply contributed to the drop, intensifying scrutiny of cash-return policies across the sector. According to data from the U.S. Energy Information Administration, Brent futures fell more than 10 percent in 2025—an uncommon setback after two years of elevated pricing.
Peer companies have reacted in different ways. Norway’s Equinor last week reported softer quarterly earnings and cut its planned share repurchases to $1.5 billion for 2026, down sharply from $5 billion in 2025. The company also said it would scale back investments in renewables and other low-emission initiatives. Shell, meanwhile, maintained buybacks at $3.5 billion, marking its 17th consecutive quarter of at least $3 billion in repurchases, though the Anglo-Dutch producer likewise cited lower commodity prices as a drag on recent performance.
Strategic Priorities
BP indicated the pause in share buybacks is intended to accelerate deleveraging rather than signal a permanent shift in capital-allocation priorities. Howle emphasized that management remains focused on four principal objectives: expanding free cash flow, improving returns, trimming costs and strengthening the balance sheet. The company reiterated plans to keep annual capital spending within the established $14-$18 billion range over the medium term, though 2026 will fall at the lower end.
Analysts said the board’s decision reflects growing caution as oil prices struggle to regain momentum. With earnings down year on year and the macro-outlook uncertain, maintaining liquidity and limiting leverage have taken precedence over immediate shareholder distributions.
Investors will look for additional clarity when O’Neill assumes leadership in April. The incoming CEO is expected to update the market on BP’s strategy for balancing traditional hydrocarbons with low-carbon ventures, a subject that gained prominence after the company set interim emissions targets in prior years.
For now, BP’s pause on repurchases underscores the pressure lower crude prices can exert on Big Oil’s cash-return models, even as dividend commitments remain intact.
Crédito da imagem: Getty Images News
