Fourth quarter and full year highlights

• Strong underlying financial performance: 2025 underlying RC profit $7.5bn delivered against a weaker oil price environment. Operating cash flow $24.5bn, including $2.9bn adjusted working capital build(a).  
• Strong operations and progress across upstream and downstream: Record full year upstream plant reliability 96.1%; 2025 underlying production held broadly flat vs. 2024; 7 major projects started up in 2025; reserves replacement ratio increased to 90%; record full year refining availability 96.3%; customers delivered its highest underlying earnings since 2019 with all businesses growing year on year.
• Progress on our strategic targets: Expected proceeds from completed and announced divestments now above $11bn; reached an agreement to sell a 65% shareholding in Castrol - resulting in expected net proceeds of approximately $6bn; closed the sale of Netherlands retail, US onshore wind, and non-controlling interests in US midstream assets; increased group structural cost reduction target to $5.5-6.5 billion by end 2027.
• Positioning the company for the long term: The board has decided to suspend the share buyback and fully allocate excess cash to accelerate strengthening of our balance sheet. This creates a strong platform to invest with discipline into our distinctive deep hopper of oil & gas opportunities. 

Carol Howle, Interim chief executive officer:
"2025 was a year of strong underlying financial results, strong operational performance, and meaningful strategic progress. We have made progress against our four primary targets - growing cash flow and returns, reducing costs, and strengthening the balance sheet - but know there is more work to be done, and we are clear on the urgency to deliver.

"With a continued emphasis on capital discipline and returns, we are reducing capital expenditure for 2026 to the lower end of the guidance range, while continuing to drive down our cost base. We are also taking decisive action to high-grade our portfolio and strengthen our company, including the execution of our $20bn disposal programme and the decision to suspend the share buyback and fully allocate excess cash to our balance sheet. These decisions position us to progress long term value growth through the distinctive opportunity set we are creating in our upstream business, including the Bumerangue discovery in Brazil, where our initial estimates indicate around 8 billion barrels of liquids in place.

"We look forward to Meg O'Neill joining as CEO in April as we accelerate our progress to build a simpler, stronger and more valuable bp for the future. We are in action and we can and will do better for our shareholders."

(a) Change in working capital adjusted for inventory holding losses, fair value accounting effects relating to subsidiaries and other adjusting items.

Highlights

4Q25 underlying replacement cost (RC) profit $1.5 billion

• Underlying RC profit for the quarter of $1.5 billion, compared with $2.2 billion for the previous quarter. Compared with the third quarter 2025, the underlying result reflects lower upstream realizations, adverse impact of upstream production mix, lower refinery throughputs due to higher turnaround activity and the temporary impact of reduced capacity following an outage at the Whiting refinery and seasonally lower customer volumes, partly offset by lower exploration write-offs. The underlying effective tax rate (ETR) in the quarter was 43%, compared with 39% for the previous quarter, which reflects changes in the geographical mix of profits.
• Reported loss for the quarter was $3.4 billion, compared with a profit of $1.2 billion for the third quarter 2025. The reported result for the fourth quarter is adjusted for inventory holding loss of $0.7 billion (net of tax) and a net adverse impact of adjusting items of $4.3 billion (net of tax) to derive the underlying RC profit. Adjusting items include post-tax net impairments and impairments in equity-accounted entities of around $4 billion, primarily related to our transition businesses in the gas & low carbon energy segment.

Segment results

• Gas & low carbon energy: The RC loss before interest and tax for the fourth quarter 2025 was $2.2 billion, compared with a profit of $1.1 billion for the previous quarter. After adjusting RC loss before interest and tax for a net adverse impact of adjusting items of $3.6 billion as discussed above, the underlying RC profit before interest and tax for the fourth quarter was $1.4 billion, compared with $1.5 billion in the third quarter 2025. The fourth quarter underlying result before interest and tax reflects lower realizations. The gas marketing and trading result was average.
• Oil production & operations: The RC profit before interest and tax for the fourth quarter 2025 was $1.7 billion, compared with $2.1 billion for the previous quarter. After adjusting RC profit before interest and tax for a net adverse impact of adjusting items of $0.2 billion, the underlying RC profit before interest and tax for the fourth quarter was $2.0 billion, compared with $2.3 billion in the third quarter 2025. The fourth quarter underlying result before interest and tax reflects lower realizations, the impact of production mix, and a lower share of net income of equity-accounted entities, partly offset by lower exploration write-offs.
• Customers & products: The RC profit before interest and tax for the fourth quarter 2025 was $1.4 billion, compared with $1.6 billion for the previous quarter. After adjusting RC profit before interest and tax for a net favourable impact of adjusting items of $0.1 billion, the underlying RC profit before interest and tax (underlying result) for the fourth quarter was $1.3 billion, compared with $1.7 billion in the third quarter 2025. The customers fourth quarter underlying result was lower by $0.3 billion, reflecting seasonally lower volumes and a weaker midstream performance. Fuels margins were broadly flat compared with the third quarter. The products fourth quarter underlying result was lower by $0.1 billion. Stronger realized refining margins were offset by the impacts of lower throughputs as a result of higher turnaround activity and the temporary impact of reduced capacity following an outage at the Whiting refinery. The oil trading contribution was weak.

Operating cash flow $7.6 billion and net debt $22.2 billion

• Operating cash flow for the quarter of $7.6 billion includes a $0.9 billion working capital release (after adjusting inventory holding losses, fair value accounting effects and other adjusting items) and was around $0.2 billion lower than the previous quarter reflecting lower underlying earnings partly offset by lower cash taxes paid. Net debt reduced to $22.2 billion in the fourth quarter primarily driven by the impact of proceeds from divestments of around $3.6 billion partly offset by the $0.6 billion deferred payment for the bp Bunge Bioenergia acquisition. 

Our financial frame - accelerating the pace of strengthening the balance sheet

• Our first capital allocation priority is a resilient dividend, which is expected to increase by at least 4% per ordinary share a year. For the fourth quarter, bp has announced a dividend per ordinary share of 8.320 cents.
• We are committed to strengthening the balance sheet and continue to target improving our credit metrics within an 'A' grade credit range. We reiterate our primary target of $14 to 18 billion of net debt by end 2027. When considering our capital structure, we also look at other obligations including hybrid bonds, leases and our Gulf of America settlement liabilities. The board has decided to suspend share buybacks, allocate excess cash to strengthen the balance sheet and accordingly, the guidance for shareholder distributions to be around 30-40% of operating cash flow is now retired.
• Reflecting our continued emphasis on capital efficiency, discipline and returns, we have set our 2026 capital expenditure budget in the range of $13-13.5 billion. We believe this level of capital expenditure supports progressively growing earnings per ordinary share in the long term. 

2026 guidance

• bp expects reported upstream production to be slightly lower and underlying upstream production to be broadly flat compared with 2025. Within this, bp expects underlying production from oil production & operations to be broadly flat and production from gas & low carbon energy to be lower.
• In its customers business, bp expects to make continued progress growing cash flows, supported by lower underlying operating expenditure driven by structural cost reductions. These benefits will be partly offset by the earnings impact of completed and announced divestments. Reported earnings will benefit from lower depreciation as a result of the assets held for sale accounting treatment of Castrol following the planned divestment. Fuel margins are expected to remain sensitive to movements in the cost of supply.
• In products, bp expects significantly lower level of turnaround activity.
• bp expects other businesses & corporate underlying annual charge to be around $1.0 billion for 2026. The charge may vary quarter to quarter.
• bp expects the depreciation, depletion and amortization to be broadly flat compared with 2025.
• bp expects the underlying ETR* for 2026 to be around 40% but it is sensitive to a range of factors, including the volatility of the price environment and its impact on the geographical mix of the group’s profits and losses.
• bp expects capital expenditure to be $13-13.5 billion, weighted to the first half.  
• bp expects divestment and other proceeds to be $9-10 billion in 2026, including approximately $6 billion from the announced Castrol transaction, all significantly weighted to the second half. 
• bp expects Gulf of America settlement payments for the year to be around $1.6 billion pre-tax including $0.4 billion pre-tax to be paid during the first quarter and $1.1 billion pre-tax to be paid during the second quarter.

Oil production & operations

Financial results

• The replacement cost (RC) profit before interest and tax for the fourth quarter and full year was $1,735 million and $8,558 million respectively, compared with $2,571 million and $10,789 million for the same periods in 2024. The fourth quarter and full year are adjusted by an adverse impact of net adjusting items of $223 million and $856 million respectively, compared with an adverse impact of net adjusting items of $353 million and $1,148 million for the same periods in 2024.
• After adjusting RC profit before interest and tax for adjusting items, the underlying RC profit before interest and tax for the fourth quarter and full year was $1,958 million and $9,414 million respectively, compared with $2,924 million and $11,937 million for the same periods in 2024. 
• The underlying RC profit before interest and tax for the fourth quarter and full year, compared with the same periods in 2024, primarily reflect lower liquids realizations, lower share of net income of equity-accounted entities, and a higher depreciation, depletion and amortization charge, partly offset by higher volumes and lower exploration write-offs.

Operational update

• Reported production for the quarter was 1,555mboe/d, 7.4% higher than the same period in 2024. Underlying production for the quarter was 5.4% higher, mainly in bpx energy.
• Reported production for the full year was 1,527mboe/d, 3.8% higher than the same period in 2024. Underlying production was 2.6% higher, mainly in bpx energy.

Strategic progress

• bp’s initial estimate, in regards to the August 2025 exploration discovery in the Bumerangue block offshore Brazil, is that there is around 8 billion barrels of liquids in place - split roughly 50% oil, 50% condensate. As is normal at this stage, there is a wide range of uncertainty around this estimate. bp is now putting plans in place for an appraisal programme which is expected to start around the end of the year. This will provide data from locations across the reservoir, to enable us to describe the fluid characteristics and resource potential. 
• In December bp successfully delivered first oil from the Atlantis Drill Center 1 expansion project in the US Gulf of America, its seventh upstream major project* start-up of the year. The two-well subsea tieback to the existing Atlantis platform is expected to add 15,000boe/d gross peak annualized average production.
• In December bp completed the divestment of the Culzean gas field in the UK North Sea to NEO Next.
• In December bp completed the second phase of its divestment of non-controlling interests in Permian and Eagle Ford midstream assets to investor Sixth Street for a total of $1.5 billion. The first phase completed in November.
• In December bp was the apparent highest bidder on 51 lease blocks in the US Gulf of America Federal Lease Sale BBG1, which included 219 leases.
• In December the development programme for the Karabagh field in the Caspian Sea, offshore Azerbaijan, was approved by the management committee (joint venture) and subsequently by State Oil Company of the Azerbaijan Republic (SOCAR) as the State representative. Seismic acquisition commenced thereafter. 
• In February 2026 bp and the Kuwait Oil Company signed a two-year extension of the enhanced technical service agreement to manage development of the giant Burgan oil field.

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