British oil giant BP announced Tuesday a sharp 86% drop in annual net profit and a surprise decision to suspend the entire share buyback program to save cash and trim debts.
The financial setback comes at a sensitive time, as the company prepares to welcome its new CEO, Meg O'Neill, in April and while it hopes to strengthen the balance sheet which is hit by lower crude prices and a huge write-down linked to its green energy transition.
Profit after tax dropped to $55 million last year from $381 million a year earlier, BP said in a statement.
The company said the annual results included an impairment totaling around $4 billion linked to its “transition businesses in the gas and low carbon energy segment.”
It added that its annual performance was “delivered against a weaker oil price environment.”
Underlying earnings, which strip out some energy price movements and one-off charges, fell 16% to $7.5 billion last year, slightly below the market expectations of $7.58 billion.
Meanwhile, BP surprised shareholders by a decision to suspend its share buyback program, as the company intensifies its efforts to shore up its balance sheet.
BP said it would “fully allocate excess cash” to cutting its $22 billion debt pile, acknowledging that “urgency” was needed to revive the fortunes of one of the UK’s best-known companies.
The move sent the company’s shares down more than 5% in London, to become one of the worst performers in the pan-European STOXX 600 index.
Carol Howle, BP interim CEO, said in a statement, “We have made progress against our four primary targets - growing cash flow and returns, reducing costs, and strengthening the balance sheet - but know there is more work to be done, and we are clear on the urgency to deliver.”
Internal factors were not alone responsible for the company’s decline in net profit, as BP said its performance was driven by a weaker oil price environment that clouded 2025.
Energy prices have been under pressure on concerns that US President Donald Trump's tariffs will crimp economic growth.
The international oil price benchmark, Brent North Sea crude, was steady Tuesday at $69 per barrel.
Contrary to BP, British rival Shell last week said its net profit rose 11% last year as higher volumes and lower costs helped to offset falling oil and gas prices.
Profit after tax climbed to $17.84 billion in 2025 from $16.1 billion a year earlier.
Analysts had raised the prospect of European oil majors' buyback programs shrinking due to lower oil and gas prices. Indeed, Norway's Equinor slashed its buyback program by 70% last week.
Meg O'Neill is taking over as BP's chief executive in April, becoming the first woman to lead an oil major. Her appointment comes following Murray Auchincloss’ decision to step down late last year.
O'Neill, an American who spent 23 years working for ExxonMobil, is also the first external candidate to be appointed CEO of BP in the group's 116-year history.
She has led the Australian group Woodside Energy since April 2021.
Carole Howle, who has served as interim CEO since Auchincloss unexpectedly stepped down in December, said on Tuesday, “We look forward to Meg O'Neill joining as CEO in April as we accelerate our progress to build a simpler, stronger and more valuable BP for the future.”
“We can and will do better for our shareholders,” she added as the group suspended share buybacks.
That news hit BP's share price, which shed 5% in Tuesday’s morning trading in London.
