London, Feb 12, 2026, 11:28 GMT
- BP hit pause on share buybacks and scrapped its previous cash-return guidance, shifting focus to net debt reduction.
- The company swung to a $3.4 billion loss for the fourth quarter after taking large impairments; adjusted profit also slipped from the previous quarter.
- BP pegged capital spending for 2026 between $13 billion and $13.5 billion, sticking with its net debt target through end-2027.
BP hit pause on its share buybacks, opting to funnel surplus cash into debt reduction after reporting a fourth-quarter loss and announcing hefty write-downs, most of which stem from its transition businesses. Shares slumped Tuesday as the company detailed the new approach along with its latest numbers. 1
The sector is already on edge. Oil and gas prices have slipped, denting the cash reserves that oil majors rely on for dividends and buybacks. Now, investors are watching payout strategies more closely than ever.
BP’s shift highlights how investor priorities can pivot fast. Years of hefty payouts are giving way to a sharper focus on shoring up the balance sheet, as the company works to convince markets it can cover spending and keep up returns even if prices stay soft.
BP posted a $3.4 billion loss attributable to shareholders in the fourth quarter. Stripping out one-time items and inventory effects, underlying replacement cost profit — the oil giant’s preferred adjusted metric — landed at $1.54 billion. That’s a slide from $2.21 billion in Q3. 2
The filing showed underlying replacement cost profit dropped to $7.5 billion for 2025, compared to $8.9 billion in 2024. Operating cash flow landed at $24.5 billion in 2025, slipping from $27.3 billion the year before. Capital expenditure came in at $14.5 billion.
BP flagged $4.6 billion in pre-tax impairments and impairments in equity-accounted entities this quarter, most of it tied to transition businesses within its gas and low carbon energy arm. Operationally, the company pointed to softer upstream price realisations, plus lower refinery throughput—turnarounds played a part, as did the outage at the Whiting refinery.
The board signed off on a quarterly dividend of 8.32 cents per ordinary share and stuck to its outlook for at least 4% annual growth per share, according to the filing. It dropped its previous target for shareholder payouts to stay in the 30%-40% range of operating cash flow, following $4.49 billion in share buybacks in 2025.
BP has pegged its capital spending for 2026 between $13 billion and $13.5 billion. The company’s debt goals are unchanged—still aiming for net debt in the $14 billion to $18 billion range by the end of 2027. Fourth-quarter net debt? $22.2 billion, according to the filing.
Chief Financial Officer Kate Thomson didn’t mince words: “I really don’t like taking impairments. I’m very aware that this is our shareholders’ capital, but these are the accounting consequences of the discipline that we are putting into our company,” she said in an interview with Reuters. Thomson pointed out that while the company is not happy about the write-downs, the charges reflect a push for stricter investment discipline.
Shell and Exxon, for their part, have stuck with buybacks. Norway’s Equinor went the other way, trimming its programme, Reuters reports. The moves highlight the growing splits in payout strategy as prices come off the boil.
BP gave an update on its Bumerangue find in Brazil, telling investors it sees about 8 billion barrels of liquids in place—split between oil and condensate, according to Reuters. Appraisal wells are scheduled for drilling around year-end, the company said.
Plenty could trip this up. Should oil prices or refining margins slip more—or if BP keeps running into operational snags—hitting that debt target while nudging dividends higher gets tougher. More write-downs in lower-return segments would probably stretch investors’ patience, too.
Investors are now looking for clues on whether the buyback pause is just a short-term move. Eyes are also on how the company manages its spending versus debt as it approaches its upcoming strategy update and prepares for a change in leadership later this year.
