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BP has suspended its share buyback programme, scaled back spending plans and sold a stake in a US business, as the prospect of a weaker oil price prompts the UK group to shore up its balance sheet.
In an announcement on Tuesday, BP said the moves were needed to allow it to invest in its oil production business as the company reverses an aggressive and ill-fated push into green energy.
The energy group said it had “decided to suspend the share buyback” and would now “fully allocate excess cash” to strengthen its balance sheet, in a move that was expected by analysts.
BP has been spending more than $7bn annually, or more than a quarter of its cash flow, on repurchasing its shares.
The oil major also reported adjusted profits of $1.5bn in the fourth quarter, roughly in line with analysts’ expectations.
But its net debt at the end of 2025 stood at $22.2bn, little changed from the total the previous year despite its pledge to reduce borrowing and generate $5bn from asset sales.
On Tuesday, BP also announced a deal to sell $1.5bn of its oil and gas pipelines in the US Permian and Eagle Ford basins to Sixth Street, an investment firm.
The price of benchmark Brent crude fell by roughly 20 per cent last year, and is expected to fall further this year as more supply comes on to the market.
But so far this year, Brent has risen by more than $7 a barrel, to above $69, on concerns that a potential conflict in Iran will disrupt supplies.
BP’s share price has risen 9 per cent this year, ahead of its main European rivals Shell and TotalEnergies, which are up 1.5 per cent and 6 per cent respectively.
But its share price performance has lagged behind its US peers ExxonMobil and Chevron, which have risen 23 per cent and 17 per cent in the same period.