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BP has disclosed a 16% decrease in yearly profits due to the decline in wholesale oil prices at the end of 2025. The company, anticipating the arrival of a new CEO in April as part of its renewed focus on oil and gas earnings, reported net profits of $7.5 billion (£5.5 billion). BP highlighted progress in achieving its main objectives, such as enhancing cash flow and cutting costs, while also taking additional measures like suspending share buybacks to allocate more funds to oil and gas opportunities.
Interim CEO Carol Howle emphasized the importance of capital discipline and returns, announcing a reduction in capital expenditure for 2026 and a commitment to lowering the cost base. The company’s strategic decisions include high-grading the portfolio, executing a $20 billion disposal program, and suspending share buybacks to bolster the balance sheet. These actions position BP for long-term value growth, particularly through significant opportunities like the Bumerangue discovery in Brazil, estimated to hold around 8 billion barrels of liquids.
Despite BP’s shares rising by 10% earlier in the year, the company is redirecting its focus towards more profitable oil and gas ventures, sidelining investments in renewables. The shift in strategy follows the departure of Bernard Looney in 2023, who left amid controversy over relationships with BP colleagues.
The company’s change in direction was prompted by pressure from major investors dissatisfied with BP’s lagging share price compared to its competitors, including Shell. The architect of this shift back to fossil fuels, Murray Auchincloss, departed in December under new chairman Albert Manifold, responding to ongoing shareholder frustration over BP’s performance.
Meg O’Neill, who has led Australia’s Woodside Energy since 2021, is set to succeed Auchincloss in April, as the board aims to build on recent progress in recapturing investor value.
Despite these developments, some BP shareholders advocate for a more balanced approach to energy investments, considering both climate concerns and market demand. Groups like Follow This, focused on environmental issues, argue that BP’s financial results indicate a misguided strategy. CEO Mark van Baal expressed concern over BP’s lack of a consistent strategic direction, transitioning back to fossil fuels in a shrinking market.
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