BP Halts Share Buybacks to Cut Debt as Investors React Sharply

BP has suspended its quarterly share buyback programme and redirected capital toward reducing debt, a move that triggered a sharp sell off in its shares and signaled a clearer shift in strategy ahead of a leadership transition. The decision was announced alongside the company’s latest quarterly results and reflects growing pressure on large energy producers to balance shareholder returns with financial resilience.

The London based oil major said it would pause its regular buybacks, which had amounted to around 750 million dollars per quarter, and instead focus on trimming its debt burden. BP’s shares fell around 7 percent in afternoon trading, marking their steepest single day decline in months and underperforming the wider European energy sector. Investors appeared unsettled by the sudden change in capital allocation, even as some analysts described the move as financially prudent.

BP reported a fourth quarter underlying profit of 1.54 billion dollars, up 32 percent from a year earlier, supported by operational performance and cost discipline. Despite the stronger profit, the company also took around 4 billion dollars in charges linked to its renewables and biogas assets. These write downs were tied mainly to its solar business Lightsource bp, its US biogas unit Archaea, and offshore wind projects, highlighting the challenges BP has faced in parts of its low carbon portfolio.

The company said it reduced net debt to 22 billion dollars from 26 billion dollars in the previous quarter and reaffirmed its longer term target of bringing that figure down to between 14 billion and 18 billion dollars by 2027. Finance chief Kate Thomson said BP may revisit the question of buybacks once that goal is achieved, though she cautioned that meeting the debt target would not automatically lead to a restart.

Analysts offered mixed reactions. Some noted that lower oil and gas prices have already forced European energy companies to reconsider generous shareholder payouts. Norway’s Equinor recently cut its buyback programme significantly, while others such as Shell and Exxon have so far maintained theirs. In that context, BP’s move was seen by some as an early adjustment to a tougher market environment.

The strategic shift comes as BP prepares for a new chief executive, with Meg O’Neill set to take the role in April. Over the past year, the company has already pivoted back toward oil and gas after scaling back ambitions in renewables. BP said it is reallocating spending toward hydrocarbon projects where it expects stronger and more reliable returns.

One such project is the Bumerangue discovery offshore Brazil, which BP described as its largest hydrocarbon find in 25 years. The company estimates the field contains around 8 billion barrels of liquids in place, with appraisal drilling planned later this year. Analysts believe a significant portion of those resources could ultimately be developed, reinforcing BP’s renewed focus on traditional energy assets as it seeks to stabilise cash flow and rebuild investor confidence.