BP has increased its cost-cutting target and suspended its share buyback program in 2026 to bolster its balance sheet amid lower crude oil prices.
The British oil giant reported underlying replacement cost profit, which is a proxy for net profit, of US$1.54 billion, up 31.8 per cent from US$1.17 billion in the fourth quarter of 2025, delivered against a weaker oil price environment.
BP reported full-year underlying profit of US$7.5 billion, down from US$8.9 billion in the year before.
The company will suspend its share buyback program and introduce spending cuts to focus on strengthening its finances. BP’s previous buyback was US$750 million, announced in its third quarter results in November 2025.
“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,” said interim CEO Carol Howle.
“We are also taking decisive action to high grade our portfolio and strengthen our company, including the execution of our US$20 billion 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 have created in our upstream business, including the Bumerangue discovery in Brazil, where our initial estimates indicate around eight billion barrels of liquids in place.”
The company said it was committed to strengthening its balance sheet and reiterated its target of US$14 billion to US$18 billion of net debt by the end of 2027.
BP increased its cost reduction target to US$5.5 billion to US$6.5 billion by the end of 2027, from its previous target of US$5 billion.
Looking ahead, BP expects reported upstream production to be slightly lower in 2026 and underlying upstream production to be broadly flat compared to 2025.
It set capital expenditure to be around US$13 billion to US$13.5 billion in 2026, to support growing its earnings per ordinary share in the long term.
BP expects divestment and other proceeds to be around US$9 billion to US$10 billion in 2026.
