BP to halt stock buybacks ahead of new CEO's start

By Steve Goldstein

BP represents a 'clearing of the decks,' says one observer

BP said it will halt buybacks as it delivered earnings

BP said it was halting stock buybacks as the oil and gas giant said it wanted to rebuild its balance sheet.

The London-based energy group (UK:BP) (BP) said Tuesday it was trying to reduce net debt by as much as $18 billion by the end of 2027. BP's planned capital expenditure of between $13 billion and $13.5 billion came in below the $13.85 billion that analysts polled by Visible Alpha expected.

"This creates a strong platform to invest with discipline into our distinctive deep hopper of oil & gas opportunities," BP said.

One of those opportunities is in Brazil, where the company for the first time estimated the liquids at its Bumerangue discovery in Brazil to be 8 billion barrels of liquids.

The dramatic move - called "going nuclear" by one analyst - comes ahead of the April start for incoming CEO, Meg O'Neill. Rohit Nair, director of corporate ratings at Scope Ratings, called the move a "clearing-of-the-decks" to provide her with "operational runway."

BP shares fell 3% in London trade.

"The headline measures -- suspension of buybacks and usage of excess cash to strengthen the balance sheet -- are a realistic reflection of the limited financial headroom available to the company were oil prices to stay low," added Nair.

Underlying replacement cost profit in the fourth quarter tumbled 30% sequentially, but rose 32% from a year ago, to $1.54 billion, about in line with the $1.55 billion expected.

For the full year, its profit on that metric fell 16% to $7.49 billion.

-Steve Goldstein

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02-10-26 0823ET