On an underlying basis, BP's fourth-quarter replacement cost profit came in at $1.54bn, up 32% from a year earlier and broadly in line with market expectations. For the full year, underlying profit reached $7.5bn, down from $8.9bn in 2024, reflecting weaker oil prices and lower gas trading results .
The statutory picture was less flattering. After impairments and other adjusting items, BP reported a quarterly loss of $3.4bn. Around $4bn of write-downs were linked mainly to its low-carbon businesses, including Lightsource bp and the US biogas group Archaea, acquired in 2022 for $4.1bn. These impairments underline how uneven BP's push into renewables has been.
Cash generation, however, remained solid. Operating cash flow for the quarter was $7.6bn and $24.5bn for the year, enough to fund dividends, capital spending and debt reduction. Capital expenditure totalled $14.5bn in 2025, down from $16.2bn a year earlier, signalling tighter discipline .
A pause on buybacks, and a nod to debt
The most striking decision was BP's choice to suspend share buybacks, which had run uninterrupted since mid-2021. The company still repurchased $750m of shares in the fourth quarter, but excess cash will now be diverted to debt reduction. Net debt fell to $22.2bn at year-end, from $26.1bn in the previous quarter, and BP reiterated its target of $14bn–$18bn by 2027.
That shift reflects a sober assessment of BP's balance sheet. Gearing stands at 23.1%, higher than some peers, and credit metrics matter more in a world of lower oil prices and rising interest rates. Analysts were quick to note the contrast with rivals: Equinor has already cut buybacks sharply, while Shell and Exxon have so far held firm.
For investors, the trade-off is clear. Buybacks once flattered per-share metrics, now debt reduction should lower financial risk instead. BP still promises a resilient dividend, paying 8.32 cents per share for the quarter, but total shareholder distributions are no longer guided as a fixed share of cash flow.
Back to hydrocarbons, cautiously
Strategically, BP is leaning harder into oil and gas. Capital previously earmarked for low-carbon growth will be redirected towards upstream projects with higher expected returns. The centrepiece is Bumerangue, a Brazilian discovery estimated to contain around 8bn barrels of liquids in place, BP's largest find in 25 years . Appraisal drilling is due later this year.
Returns remain respectable. BP's return on average capital employed was 13.9% in 2025, down slightly from 14.2% in 2024 but still competitive for a European major. On valuation, the company trades at modest multiples relative to history and peers, reflecting both cyclical risks and lingering scepticism about strategy execution.
With a new chief executive arriving in April, BP is signalling a reset: fewer ambitions, fewer buybacks, and more focus on cash, debt and core assets. Whether that restraint will restore investor confidence, or merely underline how far BP has retreated from its greener aspirations, will become clearer over the next few quarters.
