BP Cancels £550 Million Shareholder Dividend to Urgently Reduce Debt

　　BP has pledged to "do better" after scrapping a $750 million (£549 million) shareholder returns program and doubling down on debt reduction.

　　This FTSE 100 constituent has long provided funding for millions of Britons' pensions through dividends. Following a period of turbulence, the company has tightened its financial controls and on Tuesday cancelled its share buyback program.

　　In order to reduce its debt burden, BP will further cut billions of dollars in costs by 2026 alongside the cancellation of the buyback.

　　The oil giant is weighed down by $22 billion in debt and recently faced further turmoil—CEO Murray Auchincloss abruptly left after less than two years in the role.

　　Albert Manifold, BP's chairman who played a key role in Auchincloss's departure, has appointed Woodside Energy CEO Meg O'Neill to take his place.

　　On Tuesday, BP's interim CEO Carol Howle sought to reassure investors, stating that the company would strive to improve its performance.

　　"We have taken action; we have the capability and will do better for shareholders," she said.

　　BP's latest $750 million share buyback program, announced in November 2025, was suspended on Tuesday.

　　BP said that, due to weaker oil prices, the company lost $3.4 billion in the three months to December last year, compared to a $1.2 billion profit in the third quarter of 2025.

　　Its core replacement cost profit (the company's preferred profitability metric) fell from $8.9 billion to $7.5 billion for the full year; quarterly replacement cost profit declined 16% sequentially, in line with analyst expectations.

　　The latest decline in profits includes a $4 billion impairment in the "low-carbon energy" division, which is part of a major write-down disclosed in January related to BP's net-zero business.

　　BP had previously forecast an oil price of around $76 per barrel this year, but the current trading price is about $69, further exacerbating the company's financial pressure.

　　Ms. Howle stated: "With continued emphasis on capital discipline and returns, we are lowering 2026 capital expenditure to the bottom of the guidance range while continuing to compress costs."

　　Last year, BP overturned the strategy launched by former boss Bernard Looney in 2020, which focused on renewables and green energy transition, following shareholder opposition. This included cancelling a multi-billion-pound hydrogen plant in Teesside.

　　The oil giant had previously planned to cut oil output by 40% and achieve net-zero emissions by 2050.

　　Ms. O'Neill, who previously worked at US oil giant ExxonMobil, will take over in April and is expected to refocus BP on its fossil fuel business.

　　BP has been increasing investment and exploration in oil and gas and is selling $20 billion in assets.

　　Hargreaves Lansdowne analyst Derren Nathan said BP's decision to cancel the share buyback was aimed at "clearing the decks" ahead of O'Neill's arrival, in order to implement a more streamlined and efficiency-focused strategy.

　　BP shares fell 3.5% in early trading.

Editor: Li Zaofu