BP has reported a 16% drop in annual profits following the slump in wholesale oil prices towards the end of 2025.
The company, which is awaiting the arrival of a new chief executive in April amid its renewed drive for oil and gas earnings, reported net profits of $7.5bn (£5.5bn).
BP said it had made progress against its four main objectives, including growing cash flow and reducing costs, but was going further.
It suspended share buybacks to help unlock more cash for oil and gas opportunities.
Money latest: Illegal supplements for sale
Interim chief executive Carol Howle told investors: “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.”
BP shares – up 10% so far this year ahead of Tuesday’s market open – were more than 3.5% lower.
The company is stepping up a focus on maximising more lucrative oil and gas opportunities at the expense of investment in renewables.
BP embraced alternatives under the leadership of Bernard Looney but he left under a cloud in 2023 over the disclosure of relationships with BP colleagues.
Murray Auchincloss was removed as CEO in December. Pic: AP
The company changed course under pressure from major investors as BP’s share price long lagged growth seen by all its major rivals, including Shell.
The architect of that shift back to fossil fuels, Murray Auchincloss, was shown the door in December – the first major move by BP’s new chairman Albert Manifold, amid continued shareholder frustration over the progress of BP’s turnaround.
Meg O’Neill, the head of Australia’s Woodside Energy since 2021, is to succeed him in April as the board seeks to build on recent progress in recapturing investor value.
Meg O’Neill. Pic: BP
However, at the same time there remain voices among BPs shareholders arguing for a more balanced approach to investment in the energy future on both climate and demand grounds.
The environment-focused shareholder lobby group Follow This argued that BP’s earnings figures demonstrated it was on the wrong path.
Its chief executive, Mark van Baal, said: “BP is in dire straits because the company has drifted without a consistent strategic direction.
“After a half-hearted energy transition, the company is now doubling down on fossil fuels in a market that will soon start to shrink.
“If BP cannot grow profits and restore its dividend in a growing market, how will the company create shareholder value in a declining one?”