BP Suspends Share Buyback Amid Overhaul

2026년 2월 10일 · Unknown · financial · 출처 Yahoo Finance

BP's previous buyback was $750 million, reduced from $1.75 billion in April last year. - arnd wiegmann/Reuters

BP suspended its share-buyback program and said it would reduce spending this year, part of a broader plan by the British energy giant to overhaul its business.

The London-based company is in the early stages of a turnaround aimed at bringing the business back to its oil-and-gas roots after an ill-timed move into renewables that left it the least profitable of the major oil companies.

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BP said Tuesday that the moves to scrap its quarterly share buyback and curb capital expenditure were aimed at shoring up the company’s finances as it works to become a simpler, more profitable business.

Shares in BP were down about 4% in early afternoon trading in Europe.

BP’s decision to halt buybacks illustrates a split among big energy companies. Exxon Mobil and Shell recently said they aim to keep buying back stock at the same pace as last year, while Chevron and France’s TotalEnergies have signaled they would slow purchases as oil prices weaken.

Crude prices fell by nearly a fifth last year, before regaining ground in early 2026 amid heightened geopolitical tensions.

The last time BP didn’t launch a quarterly buyback was in 2020 during the early stages of the pandemic, when a sharp drop in prices prompted energy companies to preserve cash.

Tuesday’s announcement represents a step change in the pace of BP’s efforts to strengthen its balance sheet, Chief Financial Officer Kate Thomson said in an interview. BP’s previous buyback was $750 million a quarter after being reduced from $1.75 billion in April.

BP also said that it was lowering capital expenditure for 2026—to no more than $13.5 billion, compared with $14.5 billion last year. And it is increasing its cost-reduction target to $6.5 billion by the end of 2027, from $5 billion.

The adjustments came as BP reported an underlying replacement cost profit—a similar metric to net income that U.S. oil companies report—of $1.54 billion for the fourth quarter, roughly in line with what analysts had expected.

BP said the moves would better position the company to invest more in its fossil-fuel business. Meg O’Neill, an oil-and-gas veteran who most recently led Australia’s Woodside Energy, is set to take over as chief executive in April.

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The company has already taken steps to cut spending on renewable-energy assets that hurt profits and led to multibillion-dollar write-downs, while turning to cost savings and asset sales to rein in its net debt. BP on Tuesday detailed accounting charges against its solar business, Lightsource bp, as well as U.S. biogas producer Archaea.

Pausing the buyback is the right long-term move given BP’s relatively weak balance sheet and emphasis on reducing debt ratios, RBC Capital Markets analysts said in a note to clients.

BP’s net debt stood at more than $22 billion in the fourth quarter, but this doesn’t include the roughly $6 billion of proceeds the company is set to receive from the sale of a majority stake in its Castrol lubricants business. The company has agreed to deals that are expected to bring in more than $11 billion so far, against its target of raising $20 billion from divestitures by 2027.

The company wants to cut net debt to between $14 billion and $18 billion by the end of 2027.

Write to Adam Whittaker at adam.whittaker@wsj.com