Oil giant BP (BP.A) has announced it is suspending share buybacks to preserve cash and protect its balance sheet. The company broke the news with its Q4 results which showed cash flow marginally ahead of estimates.
| Share price: 457.7p (-4.2%) | PE: 14.3x |
| Market cap: £73.4bn | Yield: 5.0% |
Goodbye to buybacks
BP said the decision to suspend buybacks was to ‘accelerate’ strengthening of its balance sheet. It added: ‘This creates a strong platform to invest with discipline into our distinctive deep hopper of oil and gas opportunities.’
In November 2025, the company announced a $750 million buyback alongside its Q3 results. In total, BP bought back almost $4.5 billion worth of shares last year .
Since 2021, the firm has bought back 5.24 billion shares or around a quarter of its outstanding capital. The total cost of buybacks over the last five years stands at $32.67 billion or an average of roughly $6.5 billion/year.
BP share buybacks 2021 to 2025
| Number of shares (m) | Cost ($m) | |
| 2021 | 70 | 3,150 |
| 2022 | 1,900 | 9,995 |
| 2023 | 1,263 | 7,918 |
| 2024 | 1,238 | 7,127 |
| 2025 | 836 | 4,479 |
Source: BP plc
FY26 outlook uninspiring
For the fourth quarter, BP made a loss of $3.42 billion against a loss of $1.96 billion a year earlier. However, operating cash flow of $7.6 billion was slightly ahead of the consensus of $7.39 billion.
The firm said it had made progress across its upstream and downstream operations despite flat underlying production. It started seven major projects last year, raising its reserve replacement ratio to 90% against 50% previously.
For Q1 2026, the group expects upstream production to be broadly flat against Q4. In products, industry refining margins are seen lower versus Q4 although refinery turnaround activity should also be lower.
For FY26, upstream production will be slightly lower with oil and gas output flat but gas and low-carbon energy down. On the other hand, ‘significantly’ lower turnaround activity should support product output.
It hasn’t gone down well with shareholders, but we think BP has done the right thing by stopping buybacks. Low oil prices and gearing approaching 25% meant continuing to spend over $6 billion per year was no longer sustainable.
The firm has increased its structural cost saving target, and it has some $20 billion of non-core assets for sale. That should ensure the dividend remains well-covered, so its army of income investors won’t dip out.
Read the press release here: https://www.bp.com/en/global/corporate/investors.html
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