London, Jan 15, 2026, 08:32 GMT — Regular session
- BP shares dipped in early trading following the announcement of up to $5 billion in low-carbon impairments
- Company also cautioned that softer oil trading and declining prices are set to drag on fourth-quarter earnings
- With Feb. 10 earnings in sight, analysts are zeroing in on buybacks and the balance sheet
BP shares slipped in early London trade Thursday following a warning of as much as $5 billion in impairments for the fourth quarter, largely from its low-carbon ventures. The oil giant also signaled weaker oil trading ahead.
The stock dipped around 2.3%, hovering near 433 pence, following a close of 443.5 pence on Wednesday, according to data from Investing.com.
This update is key as BP pushes to persuade investors that its renewed focus on oil and gas will boost returns, despite weaker crude prices and increasing pressure on cash payouts. The warning came ahead of its full-year results set for Feb. 10.
BP confirmed that the $4 billion to $5 billion charge won’t impact its “underlying replacement cost profit” — a key profit metric that adjusts net income by excluding certain one-offs. The company didn’t specify which projects took the hit. Reuters
It warned that softer oil trading and falling commodity prices will drag on Q4 earnings, projecting a $200 million to $400 million hit from lower oil prices and an additional $100 million to $300 million hit from weaker gas prices.
RBC analyst Biraj Borkhataria described the move as “a first step in new management ‘clearing the decks,’” suggesting the “next logical step” would be slashing the buyback to zero to boost deleveraging. Both Citi and RBC analysts anticipate BP will scale back its share buyback programme. Reuters
BP is repurchasing roughly $750 million worth of shares every quarter. Its low-carbon assets feature U.S. biogas firm Archaea, which Citi analysts suggested could be tied to the recent impairments.
The company is scaling back on transition spending and reworking its renewable portfolio, which involves plans to sell its stake in Lightsource bp and spin off its offshore wind operations into a joint venture.
BP projects net debt will drop to between $22 billion and $23 billion by the close of 2025, down from $26.1 billion at the end of Q3. This improvement is driven by $5.3 billion in divestments, the company said. That estimate does not factor in expected proceeds from a planned majority stake sale in Castrol, which BP anticipates will bring in around $6 billion.
Shareholder politics remain a hot spot. Climate activist group Follow This, joined by over 20 investors, has filed resolutions pressing BP and Shell to reveal how they plan to generate value if oil and gas demand falls, the group said Wednesday.
Oil prices dropped over 2% in early Asian trade Thursday following remarks from U.S. President Donald Trump that eased concerns about Iran, creating fresh pressure on crude-related earnings.
BP’s guidance, however, clarifies how much of the hit is just accounting rather than cash flow. The impairments won’t affect the company’s preferred underlying profit metric, but they could raise concerns about the economics of projects and upcoming investments.
Investors will get their next clear update on Feb. 10, when BP releases its results and is expected to provide details on buybacks, debt reduction, and asset sales, including the planned Castrol deal.
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