REG - BP PLC - 4Q25 SEA Part 1 of 1
10/02/2026 07:00
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RNS Number : 3210S BP PLC 10 February 2026
Top of page 1
FOR IMMEDIATE RELEASE
London 10 February 2026
BP p.l.c. Group results
Fourth quarter and full year 2025
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2025: Strong performance - building for the future
Financial summary Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit (loss) for the period attributable to bp shareholders (3,422) 1,161 (1,959) 55 381
Inventory holding (gains) losses*, net of tax 666 62 7 1,017 369
Replacement cost (RC) profit (loss)* (2,756) 1,223 (1,952) 1,072 750
Net (favourable) adverse impact of adjusting items*, net of tax 4,297 987 3,121 6,413 8,165
Underlying RC profit* 1,541 2,210 1,169 7,485 8,915
Operating cash flow* 7,602 7,786 7,427 24,493 27,297
Capital expenditure* (4,168) (3,381) (3,726) (14,533) (16,237)
Divestment and other proceeds((a)) 3,602 28 2,761 5,314 4,224
Net issue (repurchase) of shares (826) (750) (1,625) (4,486) (7,127)
Net debt*((b)) 22,182 26,054 22,997 22,182 22,997
Return on average capital employed (ROACE)* (%) 13.9% 14.2%
Adjusted EBITDA* 8,961 9,981 8,413 37,615 38,012
Underlying operating expenditure* 5,639 5,487 5,784 21,887 22,326
Announced dividend per ordinary share (cents per share) 8.320 8.320 8.000 32.960 31.270
Underlying RC profit per ordinary share* (cents) 10.00 14.24 7.36 48.02 54.40
Underlying RC profit per ADS* (dollars) 0.60 0.85 0.44 2.88 3.26
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((c)).
• 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.
" 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. "
Carol Howle
Interim chief executive officer
(a) Divestment proceeds are disposal proceeds as per the condensed
group cash flow statement. See page 3 for more information on other proceeds.
(b) See Note 9 for more information.
(c) Change in working capital adjusted for inventory holding
losses, fair value accounting effects relating to subsidiaries and other
adjusting items. See page 27.
RC profit (loss), underlying RC profit, net debt, ROACE, adjusted EBITDA,
underlying operating expenditure, underlying RC profit per ordinary share,
underlying RC profit per ADS, adjusted working capital, customers underlying
earnings (underlying RC profit before interest and tax) and excess cash are
non-IFRS measures. Inventory holding (gains) losses and adjusting items are
non-IFRS adjustments.
* For items marked with an asterisk throughout this document, definitions are
provided in the Glossary on page 32.
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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 (see Note 3 and page 25 for more information on adjusting
items).
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((a).) 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.
(a) Shareholder distribution decisions, including dividends and share
buybacks, are subject to board discretion, taking into account factors
including, but not limited to, current forecasts and credit metrics.
The commentary above contains forward-looking statements and should be read in
conjunction with the cautionary statement on page 38.
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Financial results
In addition to the highlights on page 2:
• Profit or loss attributable to bp shareholders in the fourth quarter and
full year was a loss of $3.4 billion and a profit of $0.1 billion
respectively, compared with a loss of $2.0 billion and a profit of
$0.4 billion in the same periods of 2024.
- After adjusting loss or profit attributable to bp shareholders for inventory
holding losses* and net impact of adjusting items*, underlying replacement
cost (RC) profit* for the fourth quarter and full year was $1.5 billion and
$7.5 billion respectively, compared with $1.2 billion and $8.9 billion for
the same periods of 2024. The underlying RC profit for the fourth quarter
compared with the same period in 2024 mainly reflects strong performance in
customers & products, partly offset by lower liquids realizations. The gas
marketing and trading result was average. The underlying RC profit for the
full year compared with the same period in 2024 mainly reflects lower liquids
realizations, the divestments in Egypt and Trinidad in the fourth quarter of
2024 and a lower gas marketing and trading result, partly offset by stronger
performance in customers & products. The oil trading contribution for the
fourth quarter and full year was broadly flat compared with the same periods
in 2024. See pages 6, 8 and 10 for more information.
- Adjusting items in the fourth quarter and full year had a net adverse
pre-tax impact of $3.9 billion and $5.9 billion respectively, compared with
a net adverse pre-tax impact of $3.4 billion and $9.3 billion in the same
periods of 2024.
- Adjusting items for the fourth quarter and full year include a favourable
pre-tax impact of fair value accounting effects*, relative to management's
internal measure of performance, of $0.5 billion and $2.2 billion
respectively, compared with an adverse pre-tax impact of $1.0 billion and
$1.9 billion in the same periods of 2024. This is primarily due to a relative
decline in LNG forward prices over the period in addition to the realization
of profitable cargoes, partly offset by gains from portfolio optimization,
volume updates and new deals. In addition there is no significant impact of
the fair value accounting effects relating to the hybrid bonds in the fourth
quarter 2025 compared with an adverse impact in the fourth quarter 2024 and a
significant favourable impact of these in the full year 2025 compared with an
adverse impact in 2024.
- Adjusting items for the fourth quarter and full year of 2025 include an
adverse pre-tax impact of asset impairments of $3.5 billion and $5.4 billion
respectively, compared with an adverse pre-tax impact of $1.5 billion and $5.1
billion in the same periods of 2024 (see Note 3). Fourth quarter and full year
2025 include $1.1 billion of impairment charges recognized through
equity-accounted earnings primarily relating to the Archaea and offshore wind
businesses. Fourth quarter and full year 2024 included $0.4 billion of
impairment charges recognized through equity-accounted earnings primarily
relating to our interest in Pan American Energy Group.
• The effective tax rate (ETR) on the profit or loss before taxation for
the fourth quarter and full year was -108% and 83% respectively, compared with
-222% and 82% for the same periods in 2024. Excluding inventory holding gains
or losses and adjusting items, the underlying ETR* for the fourth quarter and
full year was 43% and 42%, compared with 49% and 41% for the same periods in
2024. The lower underlying ETR for the fourth quarter reflects changes in the
geographical mix of profits. Underlying ETR is a non-IFRS measure.
• Operating cash flow* for the fourth quarter and full year was
$7.6 billion and $24.5 billion respectively, compared with $7.4 billion and
$27.3 billion for the same periods in 2024. The change in the full year
operating cash flows reflects the working capital build (after adjusting
inventory holding losses, fair value accounting effects and other adjusting
items) in 2025 compared to a release in 2024.
• Capital expenditure* in the fourth quarter and full year was
$4.2 billion and $14.5 billion respectively, compared with $3.7 billion and
$16.2 billion in the same periods of 2024 reflecting the phasing of spend
within the lower capital frame for 2025.
• Total divestment and other proceeds for the fourth quarter and full year
were $3.6 billion and $5.3 billion respectively, compared with $2.8 billion
and $4.2 billion for the same periods in 2024. Other proceeds for the fourth
quarter were $1.5 billion from the sale of non-controlling interests in the
Permian and Eagle Ford midstream assets. In addition, there was $1.0 billion
from the sale of a non-controlling interest in the subsidiary that holds our
12% share in the Trans-Anatolian natural gas pipeline (TANAP) for the full
year 2025. Other proceeds for the full year 2024 were $0.8 billion of proceeds
from the sale of our 20% share in Trans Adriatic Pipeline AG (TAP) and $0.5
billion from the sale of a 49% interest in a controlled affiliate holding
certain midstream assets offshore US.
• At the end of the fourth quarter, net debt* was $22.2 billion, compared
with $26.1 billion at the end of the third quarter 2025 and $23.0 billion at
the end of the fourth quarter 2024.
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Analysis of RC profit (loss) before interest and tax and reconciliation to
profit (loss) for the period
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
RC profit (loss) before interest and tax
gas & low carbon energy((a)) (2,172) 1,097 1,324 1,330 3,052
oil production & operations 1,735 2,119 2,571 8,558 10,789
customers & products((a)) 1,415 1,610 (1,921) 4,100 (1,043)
other businesses & corporate (386) (277) (1,161) (40) (988)
Consolidation adjustment - UPII* 21 (19) (49) 45 (25)
RC profit before interest and tax 613 4,530 764 13,993 11,785
Finance costs and net finance expense relating to pensions and other (1,242) (1,212) (1,246) (4,896) (4,515)
post-employment benefits
Taxation on a RC basis (1,830) (1,747) (1,131) (6,785) (5,672)
Non-controlling interests (297) (348) (339) (1,240) (848)
RC profit (loss) attributable to bp shareholders* (2,756) 1,223 (1,952) 1,072 750
Inventory holding gains (losses)* (874) (82) (21) (1,351) (488)
Taxation (charge) credit on inventory holding gains and losses 208 20 14 334 119
Profit (loss) for the period attributable to bp shareholders (3,422) 1,161 (1,959) 55 381
(a) Comparative periods in 2024 have been restated for material items to
reflect the move of our Archaea business from the customers & products
segment to the gas & low carbon energy segment.
Analysis of underlying RC profit (loss) before interest and tax
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Underlying RC profit (loss) before interest and tax
gas & low carbon energy 1,389 1,519 1,987 5,367 6,803
oil production & operations 1,958 2,299 2,924 9,414 11,937
customers & products 1,346 1,716 (302) 5,272 2,517
other businesses & corporate (304) (189) (527) (648) (608)
Consolidation adjustment - UPII 21 (19) (49) 45 (25)
Underlying RC profit before interest and tax 4,410 5,326 4,033 19,450 20,624
Finance costs on an underlying RC basis((a)) and net finance expense relating (1,162) (1,129) (1,096) (4,468) (4,010)
to pensions and other post-employment benefits
Taxation on an underlying RC basis (1,410) (1,639) (1,429) (6,257) (6,851)
Non-controlling interests (297) (348) (339) (1,240) (848)
Underlying RC profit attributable to bp shareholders* 1,541 2,210 1,169 7,485 8,915
(a) A non-IFRS measure. Finance costs on an underlying RC basis is
defined as finance costs as stated in the group income statement excluding
finance costs classified as adjusting items* (see footnote (h) on page 25).
Reconciliations of underlying RC profit attributable to bp shareholders to the
nearest equivalent IFRS measure are provided on page 1 for the group and on
pages 6-12 for the segments.
Operating Metrics
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
Tier 1 and tier 2 process safety events* 4 8 6 27 38
upstream* production((a)) (mboe/d) 2,344 2,362 2,299 2,312 2,358
upstream unit production costs*((b)) ($/boe) 5.82 6.19 5.93 6.28 6.17
bp-operated upstream plant reliability* 95.4% 96.8% 94.7% 96.1% 95.2%
bp-operated refining availability*((a)) 96.0% 96.6% 94.8% 96.3% 94.3%
(a) See Operational updates on pages 6, 8 and 10. Because of rounding,
upstream production may not agree exactly with the sum of gas & low carbon
energy and oil production & operations.
(b) The increase in the full year 2025, compared with the full year 2024
mainly reflects portfolio mix.
Reserves replacement ratio*
The organic reserves replacement ratio on a combined basis of subsidiaries and
equity-accounted entities was 90% for the year (2024 50%), resulting largely
from additions in the US, Trinidad and the Middle East and includes impact
from price.
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Outlook & Guidance
1Q 2026 guidance
• Looking ahead, bp expects first quarter 2026 reported upstream*
production to be broadly flat compared with the fourth quarter 2025.
• In its customers business, bp expects seasonally lower volumes compared
to the fourth quarter.
• In products, bp expects, compared to the fourth quarter, lower industry
refining margins, partly offset by a lower level of refinery turnaround
activity.
• bp expects capital expenditure* to be broadly flat compared with the
fourth quarter 2025.
2026 guidance
In addition to the guidance on page 2:
• 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.
Other items
• Structural cost reduction target increased to $5.5-6.5 billion by end
2027, reflecting the outcome of the strategic review to divest Castrol. This
excludes any savings from the intended sale of the Gelsenkirchen refinery.
The commentary above contains forward-looking statements and should be read in
conjunction with the cautionary statement on page 38.
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gas & low carbon energy*
Financial results
• The replacement cost (RC) profit or loss before interest and
tax for the fourth quarter and full year was a loss of $2,172 million and a
profit of $1,330 million respectively, compared with a profit of $1,324
million and $3,052 million for the same periods in 2024. The fourth quarter
and full year are adjusted by an adverse impact of net adjusting items* of
$3,561 million and $4,037 million respectively, compared with an adverse
impact of net adjusting items of $663 million and $3,751 million for the same
periods in 2024. Adjusting items include a net impairment charge of $3,157
million for the fourth quarter, primarily relating to Lightsource bp and
Archaea, and a $1,007 million impairment charge recognized through
equity-accounted earnings, primarily relating to the Archaea and offshore wind
businesses. Adjusting items also include the impacts of fair value accounting
effects*, relative to management's internal measure of performance, which are
a favourable impact of $453 million and $1,270 million for the fourth quarter
and full year in 2025 and an adverse impact of $377 million and $1,550 million
for the same periods in 2024. See page 25 for more information on adjusting
items.
• After adjusting RC loss or profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax* for the
fourth quarter and full year was $1,389 million and $5,367 million
respectively, compared with $1,987 million and $6,803 million for the same
periods in 2024.
• The underlying RC profit before interest and tax for the
fourth quarter, compared with the same period in 2024, mainly reflects lower
realizations. The gas marketing and trading result was average.
• The underlying RC profit for the full year, compared with the
same period in 2024, reflects the divestments in Egypt and Trinidad in the
fourth quarter of 2024, a lower gas marketing and trading result, and a higher
depreciation, depletion and amortization charge, partly offset by lower
exploration write-offs and the absence of the foreign exchange loss in Egypt
in the first quarter of 2024.
Operational update
• Reported production for the quarter was 788mboe/d, 7.3% lower
than the same period in 2024, reflecting the divestments in Egypt and Trinidad
in the fourth quarter of 2024. Underlying production* was 0.9% higher due to
major project* ramp-ups partly offset by base decline.
• Reported production for the full year was 785mboe/d, 11.6%
lower than the same period in 2024, reflecting the divestments in Egypt and
Trinidad in the fourth quarter of 2024. Underlying production was 2.1% lower,
mainly due to base decline partly offset by major project start-ups.
Strategic progress
gas
• In November bp announced that it had safely completed the
Cypre seven-well drilling programme in Trinidad, the second phase of the Cypre
project, following delivery of first gas in April 2025.
• In November, the Greater Western Flank 4 project in the
North West Shelf, offshore Australia (bp 16.67%, operator Woodside) reached
final investment decision. The project involves five subsea tieback wells with
start-up targeted for 2028.
• In December Osaka Gas Trading and Export and Archaea Energy,
a bp company, entered into an agreement for the procurement of approximately
26,000Nm³ of biomethane derived from landfill gas, produced at Archaea
Energy's facilities operating in the US.
• In January 2026 bp was awarded two offshore exploration
concessions in Egypt: North-East El Alamein Offshore and West El Hammad
Offshore, advancing our exploration portfolio and long-term growth ambitions.
The North-East El Alamein Offshore Concession (bp 100% equity) covers
3,336km² near bp's West Nile Delta assets. The West El Hammad Offshore
Concession (Eni 75% operator, bp 25%) covers 1,894km² in the East Nile Delta,
also near existing infrastructure.
low carbon energy
• In December bp completed its sale of its bp Wind Energy
onshore wind business to LS Power. The transaction included 10 operating
assets across seven US states.
• In January 2026 JERA Nex bp (bp 50%) acquired EnBW's stake
in the Mona UK offshore wind project, following their decision to exit after
the result of the UK Auction Round 7. JERA Nex bp and EnBW also terminated the
Morgan project following the Auction Round outcome.
Top of page 7
gas & low carbon energy (continued)
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit before interest and tax((a)) (2,172) 1,097 1,324 1,330 3,052
Inventory holding (gains) losses* - - - - -
RC profit before interest and tax((a)) (2,172) 1,097 1,324 1,330 3,052
Net (favourable) adverse impact of adjusting items((a)) 3,561 422 663 4,037 3,751
Underlying RC profit before interest and tax 1,389 1,519 1,987 5,367 6,803
Taxation on an underlying RC basis (463) (529) (705) (1,972) (2,137)
Underlying RC profit before interest 926 990 1,282 3,395 4,666
(a) Comparative periods in 2024 have been restated for material items to
reflect the move of our Archaea business from the customers & products
segment to the gas & low carbon energy segment.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,173 1,223 1,153 4,969 4,835
Exploration write-offs
Exploration write-offs - 29 (10) 30 222
Adjusted EBITDA*
Total adjusted EBITDA 2,562 2,771 3,130 10,366 11,860
Capital expenditure*
gas((b)) 757 727 1,228 2,946 4,246
low carbon energy((c)) 132 101 (107) 464 1,596
Total capital expenditure((b)) 889 828 1,121 3,410 5,842
(b) Comparative periods in 2024 have been restated to reflect the move of
our Archaea business from the customers & products segment to the gas
& low carbon energy segment.
(c) Fourth quarter and full year 2024 include cash acquired net of
acquisition payments on completion of the Lightsource bp acquisition.
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
Production (net of royalties)((d))
Liquids* (mb/d) 86 87 91 85 96
Natural gas (mmcf/d) 4,074 4,167 4,402 4,059 4,596
Total hydrocarbons* (mboe/d) 788 806 850 785 888
Average realizations*((e))
Liquids ($/bbl) 62.72 64.57 68.93 65.50 75.37
Natural gas ($/mcf) 6.30 6.41 6.96 6.60 5.90
Total hydrocarbons ($/boe) 39.18 40.30 43.21 41.34 38.57
(d) Includes bp's share of production of equity-accounted entities in the
gas & low carbon energy segment.
(e) Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
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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. See page 25 for more information
on adjusting items.
• 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.
Top of page 9
oil production & operations (continued)
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit before interest and tax 1,735 2,116 2,564 8,560 10,780
Inventory holding (gains) losses* - 3 7 (2) 9
RC profit before interest and tax 1,735 2,119 2,571 8,558 10,789
Net (favourable) adverse impact of adjusting items 223 180 353 856 1,148
Underlying RC profit before interest and tax 1,958 2,299 2,924 9,414 11,937
Taxation on an underlying RC basis (918) (1,054) (1,226) (4,409) (5,165)
Underlying RC profit before interest 1,040 1,245 1,698 5,005 6,772
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 2,038 1,961 1,734 7,719 6,797
Exploration write-offs
Exploration write-offs 25 154 133 313 544
Adjusted EBITDA*
Total adjusted EBITDA 4,021 4,414 4,791 17,446 19,278
Capital expenditure*
Total capital expenditure 1,636 1,722 1,478 6,760 6,198
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
Production (net of royalties)((a))
Liquids* (mb/d) 1,134 1,121 1,057 1,114 1,070
Natural gas (mmcf/d) 2,442 2,525 2,269 2,391 2,318
Total hydrocarbons* (mboe/d) 1,555 1,556 1,449 1,527 1,470
Average realizations*((b))
Liquids((c)) ($/bbl) 56.09 59.58 65.56 60.64 69.85
Natural gas ($/mcf) 3.19 3.32 3.29 3.69 2.55
Total hydrocarbons((c)) ($/boe) 44.98 47.89 52.28 49.45 53.96
(a) Includes bp's share of production of equity-accounted entities in
the oil production & operations segment.
(b) Realizations are based on sales by consolidated subsidiaries only -
this excludes equity-accounted entities.
(c) Fourth quarter and full year 2024 include an immaterial impact of a
prior period adjustment in the US region.
Top of page 10
customers & products
Financial results
• The replacement cost (RC) profit before interest and tax for
the fourth quarter and full year was $1,415 million and $4,100 million
respectively, compared with a loss of $1,921 million and $1,043 million for
the same periods in 2024. The fourth quarter and full year are adjusted by a
favourable impact of net adjusting items* of $69 million and an adverse impact
of $1,172 million respectively, compared with an adverse impact of net
adjusting items of $1,619 million and $3,560 million for the same periods in
2024. See page 25 for more information on adjusting items.
• After adjusting RC profit before interest and tax for
adjusting items, the underlying RC profit before interest and tax* (underlying
result) for the fourth quarter and full year was $1,346 million and $5,272
million respectively, compared with a loss of $302 million and a profit of
$2,517 million for the same periods in 2024.
• The customers & products underlying result for the fourth
quarter and full year was significantly higher than the same periods in 2024,
reflecting stronger performance both in customers and products.
• customers - the customers underlying result for the fourth
quarter and full year was higher compared with the same periods in 2024. The
underlying result benefited from stronger integrated performance across fuels
and midstream and lower underlying operating expenditure* supported by
structural cost reductions*. The full year reflects a more than 15% increase
in Castrol's earnings with continued quarterly year-on-year growth for 10
consecutive quarters.
• products - the products underlying result for the fourth
quarter and full year was significantly higher compared with the same periods
in 2024. In refining, the fourth quarter benefited from significantly higher
realized margins and a lower level of turnaround activities. The significantly
higher products underlying result for the full year was primarily driven by
higher realized margins, the absence of the first quarter 2024 plant-wide
power outage at the Whiting refinery and higher commercial optimization. Both
the fourth quarter and full year benefited from lower underlying operating
expenditure driven by structural cost reductions. The oil trading contribution
for the fourth quarter and full year was broadly flat compared with the same
periods in 2024.
Operational update
• bp-operated refining availability* for the fourth quarter and
full year was 96.0% and 96.3%, compared with 94.8% and 94.3% for the same
periods in 2024. The full year was higher reflecting improved reliability and
notably the absence of the Whiting refinery power outage.
Strategic progress
• In December bp reached an agreement to sell a 65% shareholding
in Castrol at an enterprise value of $10.1 billion. bp's retained stake in a
new joint venture provides exposure to Castrol's growth plan while retaining
optionality to realize further value in the future. The transaction is
expected to complete by the end of 2026, subject to regulatory approvals.
• In December bp completed the sale of its mobility and
convenience and bp pulse businesses in the Netherlands to Catom, a distributor
of conventional and renewable fuels and lubricants. The transaction included
around 300 bp-owned or branded retail sites, as well as 15 operational bp
pulse EV charging hubs, eight under development and the associated Dutch fleet
business.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit (loss) before interest and tax((a)) 541 1,531 (1,935) 2,747 (1,522)
Inventory holding (gains) losses* 874 79 14 1,353 479
RC profit (loss) before interest and tax((a)) 1,415 1,610 (1,921) 4,100 (1,043)
Net (favourable) adverse impact of adjusting items((a)) (69) 106 1,619 1,172 3,560
Underlying RC profit before interest and tax 1,346 1,716 (302) 5,272 2,517
Of which:((b))
customers - convenience & mobility 877 1,167 527 3,764 2,584
Castrol - included in customers 227 261 220 971 831
products - refining & trading 469 549 (829) 1,508 (67)
Taxation on an underlying RC basis (379) (360) 73 (1,066) (452)
Underlying RC profit before interest 967 1,356 (229) 4,206 2,065
(a) Comparative periods in 2024 have been restated for material items to
reflect the move of our Archaea business from the customers & products
segment to the gas & low carbon energy segment.
(b) A reconciliation to RC profit before interest and tax by business is
provided on page 30.
Top of page 11
customers & products (continued)
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Adjusted EBITDA*((c))
customers - convenience & mobility 1,492 1,786 1,174 6,207 4,719
Castrol - included in customers 262 309 267 1,150 1,007
products - refining & trading 909 975 (365) 3,210 1,755
2,401 2,761 809 9,417 6,474
Depreciation, depletion and amortization
Total depreciation, depletion and amortization 1,055 1,045 1,111 4,145 3,957
Capital expenditure*
customers - convenience & mobility 1,122 386 541 2,480 2,059
Castrol - included in customers 51 37 60 161 227
products - refining & trading((d)) 439 384 474 1,591 1,730
Total capital expenditure((d)) 1,561 770 1,015 4,071 3,789
(c) A reconciliation to RC profit before interest and tax by business is
provided on page 30.
(d) Comparative periods in 2024 have been restated to reflect the move of
our Archaea business from the customers & products segment to the gas
& low carbon energy segment.
Fourth Third Fourth
quarter quarter quarter Year Year
Marketing sales of refined products (mb/d) 2025 2025 2024 2025 2024
US 1,197 1,273 1,244 1,230 1,209
Europe 998 1,046 993 999 1,035
Rest of World 478 456 493 467 470
2,673 2,775 2,730 2,696 2,714
Trading/supply sales of refined products 497 557 397 494 373
Total sales volume of refined products 3,170 3,332 3,127 3,190 3,087
bp average refining indicator margin* (RIM) ($/bbl) 15.2 15.8 7.2 12.8 10.7
Refinery throughputs (mb/d)
US 611 683 583 635 612
Europe 849 833 807 805 782
Total refinery throughputs 1,460 1,516 1,390 1,440 1,394
bp-operated refining availability* (%) 96.0 96.6 94.8 96.3 94.3
Top of page 12
other businesses & corporate
Other businesses & corporate comprises technology, bp ventures, our
corporate activities & functions and any residual costs of the Gulf of
America oil spill.
Financial results
• The replacement cost (RC) loss before interest and tax for the
fourth quarter and full year was $386 million and $40 million respectively,
compared with a loss of $1,161 million and $988 million for the same periods
in 2024. The fourth quarter and full year are adjusted by an adverse impact of
net adjusting items* of $82 million and a favourable impact of net adjusting
items of $608 million respectively, compared with an adverse impact of net
adjusting items of $634 million and $380 million for the same periods in 2024.
Adjusting items include favourable impacts of fair value accounting effects*
of $61 million for the quarter and $1,157 million for the full year in 2025,
and an adverse impact of $493 million and $221 million for the same periods in
2024. See page 25 for more information on adjusting items.
• After adjusting RC loss before interest and tax for adjusting
items, the underlying RC loss before interest and tax* for the fourth quarter
and full year was $304 million and $648 million respectively, compared with
$527 million and $608 million for the same periods in 2024.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit (loss) before interest and tax (386) (277) (1,161) (40) (988)
Inventory holding (gains) losses* - - - - -
RC profit (loss) before interest and tax (386) (277) (1,161) (40) (988)
Net (favourable) adverse impact of adjusting items((a)) 82 88 634 (608) 380
Underlying RC profit (loss) before interest and tax (304) (189) (527) (648) (608)
Taxation on an underlying RC basis 151 106 254 399 292
Underlying RC profit (loss) before interest (153) (83) (273) (249) (316)
(a) Includes fair value accounting effects relating to hybrid bonds. See
page 33 for more information.
Top of page 13
Financial statements
Group income statement
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Sales and other operating revenues (Note 5) 47,383 48,420 45,752 189,335 189,185
Earnings from joint ventures - after interest and tax (1,044) 176 75 (300) 909
Earnings from associates - after interest and tax 239 275 240 918 1,084
Interest and other income 452 397 1,540 1,609 2,773
Gains on sale of businesses and fixed assets 712 (18) 481 987 678
Total revenues and other income 47,742 49,250 48,088 192,549 194,629
Purchases 28,014 28,031 27,264 110,640 113,941
Production and manufacturing expenses 6,759 6,620 8,041 25,646 26,584
Production and similar taxes 406 431 402 1,698 1,799
Depreciation, depletion and amortization (Note 6) 4,526 4,472 4,257 17,822 16,622
Net impairment and losses on sale of businesses and fixed assets (Note 3) 3,624 753 3,107 6,037 6,995
Exploration expense 104 224 176 570 974
Distribution and administration expenses 4,570 4,271 4,098 17,494 16,417
Profit (loss) before interest and taxation (261) 4,448 743 12,642 11,297
Finance costs 1,289 1,267 1,291 5,106 4,683
Net finance (income) expense relating to pensions and other post-employment (47) (55) (45) (210) (168)
benefits
Profit (loss) before taxation (1,503) 3,236 (503) 7,746 6,782
Taxation 1,622 1,727 1,117 6,451 5,553
Profit (loss) for the period (3,125) 1,509 (1,620) 1,295 1,229
Attributable to
bp shareholders (3,422) 1,161 (1,959) 55 381
Non-controlling interests 297 348 339 1,240 848
(3,125) 1,509 (1,620) 1,295 1,229
Earnings per share (Note 7)
Profit (loss) for the period attributable to bp shareholders
Per ordinary share (cents)
Basic (22.21) 7.48 (12.33) 0.35 2.38
Diluted (22.21) 7.38 (12.33) 0.34 2.32
Per ADS (dollars)
Basic (1.33) 0.45 (0.74) 0.02 0.14
Diluted (1.33) 0.44 (0.74) 0.02 0.14
Top of page 14
Condensed group statement of comprehensive income
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit (loss) for the period (3,125) 1,509 (1,620) 1,295 1,229
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Currency translation differences((a)) (3) (276) (1,540) 1,863 (1,292)
Exchange (gains) losses on translation of foreign operations reclassified to 19 22 1,004 41 1,004
gain or loss on sale of businesses and fixed assets((b))
Cash flow hedges and costs of hedging 37 134 (209) 221 (535)
Share of items relating to equity-accounted entities, net of tax (3) (5) 27 (4) (12)
Income tax relating to items that may be reclassified (4) (3) (79) (22) 48
46 (128) (797) 2,099 (787)
Items that will not be reclassified to profit or loss
Remeasurements of the net pension and other post-employment benefit liability 109 (447) (3) (221) (360)
or asset
Remeasurements of equity investments (7) - (9) (6) (47)
Cash flow hedges that will subsequently be transferred to the balance sheet 2 (1) (8) 5 (1)
Income tax relating to items that will not be reclassified(c) (28) 126 (11) 55 734
76 (322) (31) (167) 326
Other comprehensive income 122 (450) (828) 1,932 (461)
Total comprehensive income (3,003) 1,059 (2,448) 3,227 768
Attributable to
bp shareholders (3,293) 726 (2,698) 1,872 7
Non-controlling interests 290 333 250 1,355 761
(3,003) 1,059 (2,448) 3,227 768
(a) Full year 2025, fourth quarter 2024 and full year 2024 are
principally affected by movements in the Pound Sterling against the US dollar.
(b) Fourth quarter and full year 2024 includes $942 million recycling of
cumulative foreign exchange losses from reserves relating to the sale of bp's
Türkiye ground fuels business to Petrol Ofisi.
(c) Full year 2024 includes a $658-million credit in respect of the
reduction in the deferred tax liability on defined benefit pension plan
surpluses following the reduction in the rate of the authorized surplus
payments tax charge in the UK from 35% to 25%.
Top of page 15
Condensed group statement of changes in equity
bp shareholders' Non-controlling interests Total
$ million equity Hybrid bonds Other interest equity
At 1 January 2025 59,246 16,649 2,423 78,318
Total comprehensive income 1,872 799 556 3,227
Dividends (5,087) - (524) (5,611)
Cash flow hedges transferred to the balance sheet, net of tax (6) - - (6)
Repurchase of ordinary share capital (4,012) - - (4,012)
Share-based payments, net of tax 1,112 - - 1,112
Share of equity-accounted entities' changes in equity, net of tax 1 - - 1
Issue of perpetual hybrid bonds((a)) - 500 - 500
Redemption of perpetual hybrid bonds, net of tax((b)) - (1,200) - (1,200)
Payments on perpetual hybrid bonds (9) (793) - (802)
Transactions involving non-controlling interests, net of tax((c)(d)) (65) - 2,538 2,473
At 31 December 2025 53,052 15,955 4,993 74,000
bp shareholders' Non-controlling interests Total
$ million equity Hybrid bonds Other interest equity
At 1 January 2024 70,283 13,566 1,644 85,493
Total comprehensive income 7 641 120 768
Dividends (5,018) - (375) (5,393)
Cash flow hedges transferred to the balance sheet, net of tax (10) - - (10)
Repurchase of ordinary share capital (7,302) - - (7,302)
Share-based payments, net of tax 1,083 - - 1,083
Issue of perpetual hybrid bonds (22) 4,352 - 4,330
Redemption of perpetual hybrid bonds, net of tax 9 (1,300) - (1,291)
Payments on perpetual hybrid bonds - (610) - (610)
Transactions involving non-controlling interests, net of tax 216 - 1,034 1,250
At 31 December 2024 59,246 16,649 2,423 78,318
(a) During the full year 2025 a group subsidiary issued perpetual
subordinated hybrid securities of $0.5 billion, the proceeds of which were
specifically earmarked to fund BP Alternative Energy Investments Ltd including
the funding of Lightsource bp. This transaction resulted in a reduction of net
debt and gearing.
(b) During the full year 2025, BP Capital Markets p.l.c. exercised its
option to redeem $1.2 billion of hybrid bonds.
(c) During the full year 2025, a group subsidiary that holds a 12% stake
in the Trans-Anatolian Natural Gas Pipeline (TANAP), issued $1.0 billion of
equity instruments with preferred distributions. The group retains control
over the ability to defer these distributions which are not guaranteed, and
investors cannot redeem their shares except under specific conditions that are
within the group's control.
(d) During the fourth quarter and full year 2025, a group subsidiary that
holds interests in Permian and Eagle Ford midstream assets, divested equity
instruments with preferred distributions for proceeds of $1.5 billion. The
group retains control over the ability to defer these distributions which are
not guaranteed, and investors cannot redeem their shares except under specific
conditions that are within the group's control.
Top of page 16
Group balance sheet
31 December 31 December
$ million 2025 2024
Non-current assets
Property, plant and equipment 98,633 100,238
Goodwill 10,300 14,888
Intangible assets 8,197 9,646
Investments in joint ventures 13,400 12,291
Investments in associates 7,325 7,741
Other investments 857 1,292
Fixed assets 138,712 146,096
Loans 1,991 1,961
Trade and other receivables 2,376 1,815
Derivative financial instruments 20,957 16,114
Prepayments 608 548
Deferred tax assets 4,325 5,403
Defined benefit pension plan surpluses 7,771 7,457
176,740 179,394
Current assets
Loans 457 223
Inventories 22,499 23,232
Trade and other receivables 26,014 27,127
Derivative financial instruments 5,180 5,112
Prepayments 3,422 2,594
Current tax receivable 1,153 1,096
Other investments 158 165
Cash and cash equivalents 36,556 39,204
95,439 98,753
Assets classified as held for sale (Note 2) 6,347 4,081
101,786 102,834
Total assets 278,526 282,228
Current liabilities
Trade and other payables 56,843 58,411
Derivative financial instruments 4,413 4,347
Accruals 5,572 6,071
Lease liabilities 2,832 2,660
Finance debt 3,356 4,474
Current tax payable 1,262 1,573
Provisions 4,709 3,600
78,987 81,136
Liabilities directly associated with assets classified as held for sale (Note 1,594 1,105
2)
80,581 82,241
Non-current liabilities
Other payables 7,975 9,409
Derivative financial instruments 19,667 18,532
Accruals 1,834 1,326
Lease liabilities 11,739 9,340
Finance debt 54,602 55,073
Deferred tax liabilities 7,642 8,428
Provisions 15,670 14,688
Defined benefit pension plan and other post-employment benefit plan deficits 4,816 4,873
123,945 121,669
Total liabilities 204,526 203,910
Net assets 74,000 78,318
Equity
bp shareholders' equity 53,052 59,246
Non-controlling interests 20,948 19,072
Total equity 74,000 78,318
Top of page 17
Condensed group cash flow statement
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Operating activities
Profit (loss) before taxation (1,503) 3,236 (503) 7,746 6,782
Adjustments to reconcile profit (loss) before taxation to net cash provided by
operating activities
Depreciation, depletion and amortization and exploration expenditure written 4,551 4,655 4,381 18,165 17,389
off
Net impairment and (gain) loss on sale of businesses and fixed assets 2,912 771 2,626 5,050 6,317
Earnings from equity-accounted entities, less dividends received 1,461 192 303 1,493 30
Remeasurement of joint ventures - - (917) - (917)
Net charge for interest and other finance expense, less net interest paid 486 470 602 1,229 1,642
Share-based payments 197 264 228 1,077 1,174
Net operating charge for pensions and other post-employment benefits, less (9) (96) (64) (152) (182)
contributions and benefit payments for unfunded plans
Net charge for provisions, less payments (416) (60) (185) 1,294 (152)
Movements in inventories and other current and non-current assets and 1,785 494 2,752 (4,820) 3,975
liabilities
Income taxes paid (1,862) (2,140) (1,796) (6,589) (8,761)
Net cash provided by operating activities 7,602 7,786 7,427 24,493 27,297
Investing activities
Expenditure on property, plant and equipment, intangible and other assets (3,463) (3,171) (3,893) (13,221) (15,297)
Acquisitions, net of cash acquired (642) (52) 493 (935) 53
Investment in joint ventures (22) (128) (326) (267) (850)
Investment in associates (41) (30) - (110) (143)
Total cash capital expenditure (4,168) (3,381) (3,726) (14,533) (16,237)
Proceeds from disposal of fixed assets 498 30 211 1,142 328
Proceeds from disposal of businesses, net of cash disposed 1,604 (2) 1,738 1,714 2,578
Proceeds from loan repayments 63 48 22 173 81
Cash provided from investing activities 2,165 76 1,971 3,029 2,987
Net cash used in investing activities (2,003) (3,305) (1,755) (11,504) (13,250)
Financing activities
Net issue (repurchase) of shares (Note 7) (826) (750) (1,625) (4,486) (7,127)
Lease liability payments (764) (816) (757) (3,091) (2,833)
Proceeds from long-term financing 487 1,028 3,260 2,724 10,656
Repayments of long-term financing (2,231) (1,250) (717) (5,695) (2,970)
Net increase (decrease) in short-term debt (361) 104 (2,958) (343) (2,966)
Issue of perpetual hybrid bonds(a) - - 3,034 500 4,330
Redemption of perpetual hybrid bonds(a) - (1,200) - (1,200) (1,288)
Payments relating to perpetual hybrid bonds (308) (284) (255) (1,196) (1,053)
Payments relating to transactions involving non-controlling interests (Other - (2) (21) (2) (21)
interest)
Receipts relating to transactions involving non-controlling interests (Other 1,501 8 836 2,474 1,353
interest)(a)
Dividends paid - bp shareholders (1,276) (1,288) (1,283) (5,059) (5,003)
- non-controlling interests (150) (155) (93) (506) (375)
Net cash provided by (used in) financing activities (3,928) (4,605) (579) (15,880) (7,297)
Currency translation differences relating to cash and cash equivalents (2) (51) (419) 246 (511)
Increase (decrease) in cash and cash equivalents 1,669 (175) 4,674 (2,645) 6,239
Cash and cash equivalents at beginning of period 34,955 35,130 34,595 39,269 33,030
Cash and cash equivalents at end of period(b) 36,624 34,955 39,269 36,624 39,269
(a) See Condensed group statement of changes in equity - footnotes (a) -
(d) for further information.
(b) Fourth quarter and full year 2025 include $68 million (third quarter
2025 $46 million, fourth quarter and full year 2024 $65 million) of cash and
cash equivalents classified as assets held for sale in the group balance
sheet.
Top of page 18
Notes
Note 1. Basis of preparation
The results for the periods presented herein are unaudited and, in the opinion
of management, include all adjustments necessary for a fair presentation of
the results for each period. All such adjustments are of a normal recurring
nature. This report should be read in conjunction with the consolidated
financial statements and related notes for the year ended 31 December 2024
included in bp Annual Report and Form 20-F 2024.
bp prepares its consolidated financial statements included within bp Annual
Report and Form 20-F on the basis of United Kingdom adopted international
accounting standards and IFRS Accounting Standards® (IFRS) as issued by the
International Accounting Standards Board (IASB), IFRS as adopted by the
European Union (EU), and in accordance with the provisions of the UK Companies
Act 2006 as applicable to companies reporting under international accounting
standards. IFRS as adopted by the UK does not differ from IFRS as adopted by
the EU. IFRS as adopted by the UK and EU differ in certain respects from IFRS
as issued by the IASB. The differences have no impact on the group's
consolidated financial statements for the periods presented. The financial
information presented herein has been prepared in accordance with the
accounting policies expected to be used in preparing bp Annual Report and Form
20-F 2025 which are the same as those used in preparing bp Annual Report and
Form 20-F 2024.
There are no new or amended standards or interpretations adopted from 1
January 2025 onwards that have a significant impact on the financial
information.
UK Energy Profits Levy
In October 2024, the UK government announced changes (effective from 1
November 2024) to the Energy Profits Levy including a 3% increase in the rate
taking the headline rate of tax on North Sea profits to 78%, an extension to
the period of application of the Levy to 31 March 2030 and the removal of the
Levy's main investment allowance. The changes to the rate and to the
investment allowance were substantively enacted in 2024. The extension of the
Levy to 31 March 2030 was substantively enacted in the first quarter 2025,
resulting in a non-cash deferred charge of $539 million.
Germany tax legislation
On 11 July 2025, the German federal government substantively enacted a number
of changes to its tax legislation, including a 5% reduction in the corporate
income tax rate by 2032. The reduction in the tax rate will be phased in by
means of a 1% reduction each year between 2028 and 2032 and has resulted in a
non-cash deferred tax charge of $233 million in the third quarter 2025.
Change in segmentation
During the first quarter of 2025, our Archaea business has moved from the
customers & products segment to the gas & low carbon energy segment.
The change in segmentation is consistent with a change in the way that
resources are allocated, and performance is assessed by the chief operating
decision maker, who for bp is the group chief executive.
Comparative information for 2024 has been restated where material to reflect
the changes in reportable segments.
Significant accounting judgements and estimates
bp's significant accounting judgements and estimates were disclosed in bp
Annual Report and Form 20-F 2024. These have been subsequently considered at
the end of this quarter to determine if any changes were required to those
judgements and estimates.
Impairment testing assumptions
The group's value-in-use impairment testing price assumptions for Brent oil
and Henry Hub gas were revised during the fourth quarter from those disclosed
in the bp Annual Report and Form 20-F 2024. The revised price assumptions have
been rebased in real 2024 terms. Brent oil prices in real 2024 terms were
reduced in the short-term reflecting greater crude supply. Medium to long term
prices steadily decline to a higher price of $60/bbl in 2050 continuing to
reflect the assumption that the energy system decarbonizes but at a slower
rate. The price assumptions for the Henry Hub gas price have been reduced in
the short term, reflecting higher supply in the market. Prices then steadily
increase in the medium term, as supply and demand rebalance before remaining
steady at $4.50/mmBtu up to 2050. A summary of the group's price assumptions
for value-in-use impairment testing, in real 2024 terms, is provided below:
2026 2030 2040 2050
Brent oil ($/bbl) 70 70 67 60
Henry Hub gas ($/mmBtu) 3.80 4.10 4.50 4.50
The post-tax discount rate used for value-in-use impairment testing of assets
other than certain low carbon energy assets was maintained at 8% (31 December
2024: 8%).
Provisions
The nominal risk-free discount rate applied to provisions is reviewed on a
quarterly basis. The discount rate applied to the group's provisions remains
at 4.5% (31 December 2024 4.5%).
Top of page 19
Note 2. Non-current assets held for sale
The carrying amount of assets classified as held for sale at 31 December 2025
is $6,347 million, with associated liabilities of $1,594 million.
Gas & low carbon energy
On 24 October 2024, bp completed the acquisition of the remaining 50.03% of
Lightsource bp. The acquisition included certain assets for which sales
processes were in progress at the acquisition date. Completion of the sale of
these assets is expected in the first half of 2026. The carrying amount of
assets classified as held for sale at 31 December 2025 is $1,916 million, with
associated liabilities of $1,254 million.
On 18 July 2025, bp announced that it planned to sell its US onshore wind
energy business, bp Wind Energy to LS Power. The business has interests in ten
operating onshore wind energy assets across seven US states. The transaction
completed on 9 December 2025. The related assets and liabilities of those
projects, previously classified as held for sale, were derecognised on that
date.
Customers & products
On 9 July 2025, bp announced the sale of its Netherlands mobility &
convenience and bp pulse businesses to Catom BV. The transaction includes bp's
Dutch retail sites, EV charging hubs and the associated fleet business. The
sale completed on 1 December 2025.
On 24 December 2025, bp announced an agreement with Stonepeak to divest a 65%
shareholding in the Castrol business with bp retaining a 35% interest through
a holding in a newly incorporated entity. Cash proceeds are estimated at $6
billion. The transaction is expected to complete by the end of 2026, subject
to regulatory approvals. The carrying amount of assets classified as held for
sale at 31 December 2025 is $4,431 million including $2,760 million of
goodwill that arose on the acquisition of Castrol in 2000, with associated
liabilities of $340 million. The shares to be held by Stonepeak are subject to
preferred distributions, the effect of which is that bp does not expect to
recognize income or dividends from the investment in the short to medium term.
Note 3. Impairment and losses on sale of businesses and fixed assets
Net impairment charges and losses on sale of businesses and fixed assets for
the fourth quarter and full year were $3,624 million and $6,037 million
respectively, compared with net charges of $3,107 million and $6,995 million
for the same periods in 2024 and include net impairment charges for the fourth
quarter and full year of $3,464 million and $5,395 million respectively,
compared with net impairment charges of $1,514 million and $5,189 million
for the same periods in 2024.
Gas & low carbon energy
Fourth quarter and full year 2025 impairments includes a net impairment charge
of $3,157 million and $4,038 million respectively, compared with net charges
of $890 million and $2,749 million for the same periods in 2024 in the gas
& low carbon energy segment. The net impairment charge in both the
fourth quarter and full year 2025 primarily relates to Lightsource bp and
Archaea. In addition, a further $1,007 million and $1,082 million pre-tax
impairment charges have been recognized in the fourth quarter and full year
2025 respectively through equity-accounted earnings primarily relating to the
Archaea and offshore wind businesses.
Oil production & operations
Fourth quarter and full year 2025 impairments includes a net impairment charge
of $113 million and $442 million respectively, compared with a reversal of
$129 million and net impairment charge of $771 million for the same periods in
2024 in the oil production & operations segment. In addition, a further
$122 million and $293 million pre-tax impairment charges have been recognized
in the fourth quarter and full year 2025 respectively through equity-accounted
earnings.
Customers & products
Fourth quarter and full year 2025 impairments includes a net impairment charge
of $194 million and $913 million respectively, compared with net charges of
$746 million and $1,660 million for the same periods in 2024 in the
customers & products segment.
Top of page 20
Note 4. Analysis of replacement cost profit (loss) before interest and tax and
reconciliation to profit (loss) before taxation
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
gas & low carbon energy((a)) (2,172) 1,097 1,324 1,330 3,052
oil production & operations 1,735 2,119 2,571 8,558 10,789
customers & products((a)) 1,415 1,610 (1,921) 4,100 (1,043)
other businesses & corporate (386) (277) (1,161) (40) (988)
592 4,549 813 13,948 11,810
Consolidation adjustment - UPII* 21 (19) (49) 45 (25)
RC profit (loss) before interest and tax 613 4,530 764 13,993 11,785
Inventory holding gains (losses)*
gas & low carbon energy - - - - -
oil production & operations - (3) (7) 2 (9)
customers & products (874) (79) (14) (1,353) (479)
Profit (loss) before interest and tax (261) 4,448 743 12,642 11,297
Finance costs 1,289 1,267 1,291 5,106 4,683
Net finance expense/(income) relating to pensions and other post-employment (47) (55) (45) (210) (168)
benefits
Profit (loss) before taxation (1,503) 3,236 (503) 7,746 6,782
RC profit (loss) before interest and tax*
US (895) 632 (117) 2,687 4,160
Non-US 1,508 3,898 881 11,306 7,625
613 4,530 764 13,993 11,785
(a) Comparative periods in 2024 have been restated for material items to
reflect the move of our Archaea business from the customers & products
segment to the gas & low carbon energy segment.
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Note 5. Sales and other operating revenues
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
By segment
gas & low carbon energy 10,728 9,655 9,618 40,333 32,628
oil production & operations 5,740 6,232 6,078 24,527 25,637
customers & products 36,474 38,697 35,969 148,783 155,401
other businesses & corporate 582 627 544 2,232 2,290
53,524 55,211 52,209 215,875 215,956
Less: sales and other operating revenues between segments
gas & low carbon energy 454 310 559 1,832 1,585
oil production & operations 5,332 5,908 5,482 22,876 23,237
customers & products (14) 70 137 43 317
other businesses & corporate 369 503 279 1,789 1,632
6,141 6,791 6,457 26,540 26,771
External sales and other operating revenues
gas & low carbon energy 10,274 9,345 9,059 38,501 31,043
oil production & operations 408 324 596 1,651 2,400
customers & products 36,488 38,627 35,832 148,740 155,084
other businesses & corporate 213 124 265 443 658
Total sales and other operating revenues 47,383 48,420 45,752 189,335 189,185
By geographical area
US 17,652 18,968 18,212 74,599 77,798
Non-US 37,686 37,877 35,265 147,497 148,017
55,338 56,845 53,477 222,096 225,815
Less: sales and other operating revenues between areas 7,955 8,425 7,725 32,761 36,630
47,383 48,420 45,752 189,335 189,185
Revenues from contracts with customers
Sales and other operating revenues include the following in relation to
revenues from contracts with customers:
Crude oil 592 635 515 2,063 2,219
Oil products 28,199 30,274 27,634 114,207 121,019
Natural gas, LNG and NGLs 6,973 7,192 7,268 27,477 24,464
Non-oil products and other revenues from contracts with customers 4,274 3,528 4,113 15,132 13,362
Revenue from contracts with customers 40,038 41,629 39,530 158,879 161,064
Other operating revenues((a)) 7,345 6,791 6,222 30,456 28,121
Total sales and other operating revenues 47,383 48,420 45,752 189,335 189,185
(a) Principally relates to commodity derivative transactions including
sales of bp own production in trading books.
Top of page 22
Note 6. Depreciation, depletion and amortization
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Total depreciation, depletion and amortization by segment
gas & low carbon energy 1,173 1,223 1,153 4,969 4,835
oil production & operations 2,038 1,961 1,734 7,719 6,797
customers & products 1,055 1,045 1,111 4,145 3,957
other businesses & corporate 260 243 259 989 1,033
4,526 4,472 4,257 17,822 16,622
Total depreciation, depletion and amortization by geographical area
US 1,780 1,898 1,739 7,311 6,747
Non-US 2,746 2,574 2,518 10,511 9,875
4,526 4,472 4,257 17,822 16,622
Note 7. Earnings per share and shares in issue
Basic earnings per ordinary share (EpS) amounts are calculated by dividing the
profit (loss) for the period attributable to ordinary shareholders by the
weighted average number of ordinary shares outstanding during the period.
Against the authority granted at bp's 2025 annual general meeting,
141 million ordinary shares repurchased were settled during the fourth
quarter 2025 for a total cost of $826 million. All of these shares were held
as treasury shares. A further 74 million ordinary shares were repurchased
between the end of the reporting period and the date when the financial
statements are authorised for issue for a total cost of $448 million. This
amount has been accrued at 31 December 2025. The number of shares in issue is
reduced when shares are repurchased, but is not reduced in respect of the
period-end commitment to repurchase shares subsequent to the end of the
period.
The calculation of EpS is performed separately for each discrete quarterly
period, and for the year-to-date period. As a result, the sum of the discrete
quarterly EpS amounts in any particular year-to-date period may not be equal
to the EpS amount for the year-to-date period.
For the diluted EpS calculation the weighted average number of shares
outstanding during the period is adjusted for the number of shares that are
potentially issuable in connection with employee share-based payment plans
using the treasury stock method.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Results for the period
Profit (loss) for the period attributable to bp shareholders (3,422) 1,161 (1,959) 55 381
Less: preference dividend - - - 1 1
Less: (gain) loss on redemption of perpetual hybrid bonds - - - - (10)
Profit (loss) attributable to bp ordinary shareholders (3,422) 1,161 (1,959) 54 390
Number of shares (thousand)((a)(b))
Basic weighted average number of shares outstanding 15,409,755 15,518,940 15,885,184 15,586,782 16,385,535
ADS equivalent((c)) 2,568,292 2,586,490 2,647,530 2,597,797 2,730,922
Weighted average number of shares outstanding used to calculate diluted 15,409,755 15,735,029 15,885,184 15,913,000 16,816,664
earnings per share
ADS equivalent((c)) 2,568,292 2,622,504 2,647,530 2,652,166 2,802,777
Shares in issue at period-end 15,377,210 15,487,180 15,851,028 15,377,210 15,851,028
ADS equivalent((c)) 2,562,868 2,581,196 2,641,838 2,562,868 2,641,838
(a) If the inclusion of potentially issuable shares would decrease loss
per share, the potentially issuable shares are excluded from the weighted
average number of shares outstanding used to calculate diluted earnings per
share. The numbers of potentially issuable shares that have been excluded from
the calculation for the fourth quarter 2025 are 251,360 thousand (ADS
equivalent 41,893 thousand) and for the fourth quarter 2024 are 367,276
thousand (ADS equivalent 61,213 thousand).
(b) Excludes treasury shares and includes certain shares that will be
issued in the future under employee share-based payment plans.
(c) One ADS is equivalent to six ordinary shares.
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Note 8. Dividends
Dividends payable
bp today announced an interim dividend of 8.320 cents per ordinary share which
is expected to be paid on 27 March 2026 to ordinary shareholders and American
Depositary Share (ADS) holders on the register on 20 February 2026. The
ex-dividend date will be 19 February 2026 for ordinary shareholders and 20
February 2026 for ADS holders. The corresponding amount in sterling is due to
be announced on 17 March 2026, calculated based on the average of the market
exchange rates over three dealing days between 11 March 2026 and 13 March
2026. Holders of ADSs are expected to receive $0.4992 per ADS (less applicable
fees). The board has decided not to offer a scrip dividend alternative in
respect of the fourth quarter 2025 dividend. Ordinary shareholders and ADS
holders (subject to certain exceptions) will be able to participate in a
dividend reinvestment programme. Details of the fourth quarter dividend and
timetable are available at bp.com/dividends and further details of the
dividend reinvestment programmes are available at bp.com/drip.
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
Dividends paid per ordinary share
cents 8.320 8.320 8.000 32.640 30.540
pence 6.239 6.194 6.296 24.509 23.720
Dividends paid per ADS (cents) 49.92 49.92 48.00 195.84 183.24
Note 9. Net debt
Net debt* 31 December 30 September 31 December
$ million 2025 2025 2024
Finance debt((a)) 57,958 60,188 59,547
Fair value (asset) liability of hedges related to finance debt((b)) 780 775 2,654
58,738 60,963 62,201
Less: cash and cash equivalents 36,556 34,909 39,204
Net debt((c)) 22,182 26,054 22,997
Total equity 74,000 77,645 78,318
Gearing* 23.1% 25.1% 22.7%
(a) The fair value of finance debt at 31 December 2025 was
$54,935 million (30 September 2025 $57,113 million, 31 December 2024 $54,966
million).
(b) Derivative financial instruments entered into for the purpose of
managing foreign currency exchange risk associated with net debt with a fair
value liability position of $94 million at 31 December 2025 (third quarter
2025 liability of $94 million and fourth quarter 2024 liability of
$166 million) are not included in the calculation of net debt shown above as
hedge accounting is not applied for these instruments.
(c) Net debt does not include accrued interest, which is reported within
other receivables and other payables on the balance sheet and for which the
associated cash flows are presented as operating cash flows in the group cash
flow statement.
As part of actively managing its debt portfolio, in the fourth quarter the
group bought back $2.0 billion of finance debt consisting entirely of US
dollar bonds. These transactions had no significant impact on net debt or
gearing.
Note 10. Statutory accounts
The financial information shown in this publication, which was approved by the
Board of Directors on 9 February 2026, is unaudited and does not constitute
statutory financial statements. Audited financial information will be
published in bp Annual Report and Form 20-F 2025. bp Annual Report and Form
20-F 2024 has been filed with the Registrar of Companies in England and Wales.
The report of the auditor on those accounts was unqualified, did not include a
reference to any matters to which the auditor drew attention by way of
emphasis without qualifying the report and did not contain a statement under
section 498(2) or section 498(3) of the UK Companies Act 2006.
Top of page 24
Additional information
Capital expenditure*
Capital expenditure is a measure that provides useful information to
understand how bp's management allocates resources including the investment of
funds in projects which expand the group's activities through acquisition.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Capital expenditure
Organic capital expenditure* 3,524 3,328 4,229 13,613 16,135
Inorganic capital expenditure*((a)) 644 53 (503) 920 102
4,168 3,381 3,726 14,533 16,237
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Capital expenditure by segment
gas & low carbon energy((a)(b)) 889 828 1,121 3,410 5,842
oil production & operations 1,636 1,722 1,478 6,760 6,198
customers & products((b)) 1,561 770 1,015 4,071 3,789
other businesses & corporate 82 61 112 292 408
4,168 3,381 3,726 14,533 16,237
Capital expenditure by geographical area
US 1,529 1,591 1,765 6,129 6,566
Non-US 2,639 1,790 1,961 8,404 9,671
4,168 3,381 3,726 14,533 16,237
(a) Fourth quarter and full year 2025 include the final payment for the
bp Bunge Bioenergia acquisition. Fourth quarter and full year 2024 include the
cash acquired net of acquisition payments on completion of the bp Bunge
Bioenergia and Lightsource bp acquisitions.
(b) Comparative periods in 2024 have been restated to reflect the move of
our Archaea business from the customers & products segment to the gas
& low carbon energy segment.
Top of page 25
Adjusting items*
Adjusting items are items that management considers to be important to
period-on-period analysis of the group's results and are disclosed in order to
enable investors to better understand and evaluate the group's reported
financial performance. Adjusting items are used as a reconciling adjustment to
derive underlying RC profit or loss and related underlying measures which are
non-IFRS measures.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
gas & low carbon energy
Gains on sale of businesses and fixed assets 190 - 268 258 297
Net impairment and losses on sale of businesses and fixed assets((a)(b)) (3,154) (489) (1,623) (4,448) (3,521)
Environmental and related provisions - - - - -
Restructuring, integration and rationalization costs 1 8 (1) (2) (25)
Fair value accounting effects((c)(d)) 453 131 (377) 1,270 (1,550)
Other((e)) (1,051) (72) 1,070 (1,115) 1,048
(3,561) (422) (663) (4,037) (3,751)
oil production & operations
Gains on sale of businesses and fixed assets 231 (29) 35 407 144
Net impairment and losses on sale of businesses and fixed assets((b)) (217) 10 129 (552) (790)
Environmental and related provisions (37) (145) (60) (268) 5
Restructuring, integration and rationalization costs 11 9 (14) (67) (15)
Fair value accounting effects - - - - -
Other((f)) (211) (25) (443) (376) (492)
(223) (180) (353) (856) (1,148)
customers & products
Gains on sale of businesses and fixed assets 288 10 169 317 190
Net impairment and losses on sale of businesses and fixed assets((a)(b)) (253) (274) (1,531) (1,030) (2,600)
Environmental and related provisions (66) (1) (102) (68) (99)
Restructuring, integration and rationalization costs (47) (17) (85) (241) (123)
Fair value accounting effects((d)) 34 42 (119) (207) (81)
Other((g)) 113 134 49 57 (847)
69 (106) (1,619) (1,172) (3,560)
other businesses & corporate
Gains on sale of businesses and fixed assets 3 2 4 5 39
Net impairment and losses on sale of businesses and fixed assets - - (28) (5) (19)
Environmental and related provisions (182) (48) (98) (320) (87)
Restructuring, integration and rationalization costs 35 (8) (21) (210) (59)
Fair value accounting effects((d)) 61 (13) (493) 1,157 (221)
Gulf of America oil spill (4) (9) (12) (31) (51)
Other 5 (12) 14 12 18
(82) (88) (634) 608 (380)
Total before interest and taxation (3,797) (796) (3,269) (5,457) (8,839)
Finance costs((h)) (80) (83) (150) (428) (505)
Total before taxation (3,877) (879) (3,419) (5,885) (9,344)
Taxation on adjusting items((i)(j)) (418) 125 266 246 1,495
Taxation - tax rate change effect((k)) (2) (233) 32 (774) (316)
Total after taxation for period (4,297) (987) (3,121) (6,413) (8,165)
(a) Comparative periods in 2024 have been restated to reflect the move
of our Archaea business from the customers & products segment to the gas
& low carbon energy segment.
(b) See Note 3 for further information.
(c) Under IFRS bp marks-to-market the value of the hedges used to
risk-manage LNG contracts, but not the contracts themselves, resulting in a
mismatch in accounting treatment. The fair value accounting effect includes
the change in value of LNG contracts that are being risk managed, and the
underlying result reflects how bp risk-manages its LNG contracts.
(d) For further information, including the nature of fair value accounting
effects reported in each segment, see pages 3, 6 and 33.
(e) Fourth quarter and full year 2025 include $1,007 million and $1,082
million impairment charges recognized through equity-accounted earnings
primarily relating to the Archaea and offshore wind businesses. Fourth quarter
and full year 2024 include a $508 million gain relating to the remeasurement
of bp's pre-existing 49.97% interest in Lightsource bp and $498 million
relating to the remeasurement of certain US assets excluded from the
Lightsource bp acquisition.
(f) Fourth quarter and full year 2024 includes $429 million of
impairment charges recognized through equity-accounted earnings relating to
our interest in Pan American Energy Group.
(g) Full year 2024 includes the initial recognition of onerous contract
provisions related to Gelsenkirchen refinery. The unwind of these provisions
in the subsequent quarters are reported as an adjusting item as the
contractual obligations are settled.
Top of page 26
(h) Includes the unwinding of discounting effects relating to Gulf of
America oil spill payables, the income statement impact of temporary valuation
differences related to the group's interest rate and foreign currency exchange
risk management associated with finance debt, and the unwinding of discounting
effects relating to certain onerous contract provisions.
(i) Includes certain foreign exchange effects on tax as adjusting items.
These amounts represent the impact of: (i) foreign exchange on deferred tax
balances arising from the conversion of local currency tax base amounts into
functional currency, and (ii) taxable gains and losses from the retranslation
of US dollar-denominated intra-group loans to local currency.
(j) Fourth quarter and full year 2025 include limited tax relief on
impairment charges and the impact of the reassessment of the recognition of
deferred tax assets.
(k) Third quarter 2025 and full year 2025 include the deferred tax impact
of a change in the tax rate in Germany. Full year 2025 and full year 2024
include revisions to the deferred tax impact of the introduction of the UK
Energy Profits Levy (EPL) on temporary differences existing at the opening
balance sheet date. The EPL increases the headline rate of tax on taxable
profits from bp's North Sea business to 78%. In the first quarter 2025 a
two-year extension of the EPL to 31 March 2030 was substantively enacted. See
Note 1 for further information.
Net debt including leases*
Gearing including leases and net debt including leases are non-IFRS measures
that provide the impact of the group's lease portfolio on net debt and
gearing.
Net debt including leases 31 December 30 September 31 December
$ million 2025 2025 2024
Net debt* 22,182 26,054 22,997
Lease liabilities 14,571 14,629 12,000
Net partner (receivable) payable for leases entered into on behalf of joint (1,067) (1,082) (88)
operations
Net debt including leases 35,686 39,601 34,909
Total equity 74,000 77,645 78,318
Gearing including leases* 32.5% 33.8% 30.8%
Gulf of America oil spill
31 December 31 December
$ million 2025 2024
Gulf of America oil spill payables and provisions (7,256) (7,958)
Of which - current (1,522) (1,127)
Deferred tax asset 1,110 1,205
During the second quarter pre-tax payments of $1,129 million were made
relating to the 2016 consent decree and settlement agreement with the United
States and the five Gulf coast states. Payables and provisions presented in
the table above reflect the latest estimate for the remaining costs associated
with the Gulf of America oil spill. Where amounts have been provided on an
estimated basis, the amounts ultimately payable may differ from the amounts
provided and the timing of payments is uncertain. Further information relating
to the Gulf of America oil spill, including information on the nature and
expected timing of payments relating to provisions and other payables, is
provided in bp Annual Report and Form 20-F 2024 - Financial statements -
Notes 7, 22, 23, 29, and 33.
Top of page 27
Working capital* reconciliation
Change in working capital adjusted for inventory holding gains/losses*, fair
value accounting effects* relating to subsidiaries and other adjusting items
is a non-IFRS measure. It represents what would have been reported as
movements in inventories and other current and non-current assets and
liabilities, if the starting point in determining net cash provided by
operating activities had been underlying replacement cost profit rather than
profit for the period.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Movements in inventories and other current and non-current assets and 1,785 494 2,752 (4,820) 3,975
liabilities as per condensed group cash flow statement((a))
Adjusted for inventory holding gains (losses) (Note 4) (874) (82) (21) (1,351) (488)
Adjusted for fair value accounting effects relating to subsidiaries 608 177 (992) 2,298 (2,018)
Other adjusting items((b)) (594) 322 (460) 975 (661)
Working capital release (build) after adjusting for net inventory holding 925 911 1,279 (2,898) 808
gains (losses), fair value accounting effects and other adjusting items
(a) The movement in working capital includes outflows relating to the
Gulf of America oil spill on a pre-tax basis of $1 million and
$1,137 million in the fourth quarter and full year 2025 (third quarter 2025
$5 million, fourth quarter 2024 $1 million, full year 2024 $1,141 million).
(e) Other adjusting items relate to the non-cash movement of US
emissions obligations carried as a provision that will be settled by
allowances held as inventory.
Adjusted earnings before interest, taxation, depreciation and amortization
(adjusted EBITDA)*
Adjusted EBITDA is a non-IFRS measure closely tracked by bp's management to
evaluate the underlying trends in bp's operating performance on a comparable
basis, period on period.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
Profit (loss) for the period (3,125) 1,509 (1,620) 1,295 1,229
Finance costs 1,289 1,267 1,291 5,106 4,683
Net finance (income) expense relating to pensions and other post-employment (47) (55) (45) (210) (168)
benefits
Taxation 1,622 1,727 1,117 6,451 5,553
Profit before interest and tax (261) 4,448 743 12,642 11,297
Inventory holding (gains) losses*, before tax 874 82 21 1,351 488
RC profit before interest and tax 613 4,530 764 13,993 11,785
Net (favourable) adverse impact of adjusting items*, before interest and tax 3,797 796 3,269 5,457 8,839
Underlying RC profit before interest and tax 4,410 5,326 4,033 19,450 20,624
Add back:
Depreciation, depletion and amortization 4,526 4,472 4,257 17,822 16,622
Exploration expenditure written off 25 183 123 343 766
Adjusted EBITDA 8,961 9,981 8,413 37,615 38,012
Top of page 28
Return on average capital employed (ROACE)*
Year Year
$ million 2025 2024
Profit (loss) for the year attributable to bp shareholders 55 381
Inventory holding (gains) losses*, net of tax 1,017 369
Net (favourable) adverse impact of adjusting items*, after taxation 6,413 8,165
Underlying replacement cost (RC) profit* 7,485 8,915
Interest expense, net of tax((a)) 2,800 2,709
Non-controlling interests 1,240 848
Adjusted underlying RC profit 11,525 12,472
Total equity 74,000 78,318
Finance debt 57,958 59,547
Capital employed 131,958 137,865
Less: Goodwill((b)) 13,056 14,888
Cash and cash equivalents 36,556 39,204
82,346 83,773
Average capital employed (excluding goodwill and cash and cash equivalents) 83,059 87,859
ROACE 13.9% 14.2%
(a) Finance costs, as reported in the Group income statement, were
$5,106 million (2024 $4,683 million). Interest expense which totals
$3,339 million (2024 $3,113 million) on a pre-tax basis is finance costs
excluding lease interest of $672 million (2024 $441 million), unwinding of
discount on provisions and other payables of $1,147 million (2024 $1,013
million) and other adjusting items related to finance costs $52 million gain
(2024 $116 million expense). Interest expense included above is calculated
on a post-tax basis.
(b) 2025 includes the amount of goodwill classified as held for sale at
31 December 2025.
Top of page 29
Underlying operating expenditure* reconciliation
Underlying operating expenditure is a non-IFRS measure and a subset of
production and manufacturing expenses plus distribution and administration
expenses and excludes costs that are classified as adjusting items. It
represents the majority of the remaining expenses in these line items but
excludes certain costs that are variable, primarily with volumes (such as
freight costs).
Management believes that underlying operating expenditure is a performance
measure that provides investors with useful information regarding the
company's financial performance because it considers these expenses to be the
principal operating and overhead expenses that are most directly under their
control although they also include certain foreign exchange and commodity
price effects.
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
From group income statement
Production and manufacturing expenses 6,759 6,620 8,041 25,646 26,584
Distribution and administration expenses 4,570 4,271 4,098 17,494 16,417
11,329 10,891 12,139 43,140 43,001
Less certain variable costs:
Transportation and shipping costs((a)) 2,797 2,579 3,000 10,456 10,516
Environmental costs((a)) 1,456 1,290 909 5,713 3,987
Marketing and distribution costs 486 358 350 1,692 1,882
Commission, storage and handling costs 413 410 375 1,594 1,519
Other variable costs and non-cash costs 433 654 1,056 1,819 1,495
Certain variable costs and non-cash costs 5,585 5,291 5,690 21,274 19,399
Adjusted operating expenditure* 5,744 5,600 6,449 21,866 23,602
Less certain adjusting items*:
Gulf of America oil spill 4 9 12 31 51
Environmental and related provisions 285 194 260 656 181
Restructuring, integration and rationalization costs - 8 121 520 222
Fair value accounting effects - derivative instruments relating to the hybrid (61) 13 493 (1,157) 221
bonds
Other certain adjusting items (123) (111) (221) (71) 601
Certain adjusting items 105 113 665 (21) 1,276
Underlying operating expenditure 5,639 5,487 5,784 21,887 22,326
(Decrease) increase in underlying operating expenditure (439)
Of which:
Structural cost reduction* (2,011)
Increase/(decrease) in underlying operating expenditure due to inflation, 1,572
exchange movements, portfolio changes and growth
Structural cost reduction at 31 December 2025 since 2023
Structural cost reduction in 2024 (750)
Structural cost reduction in 2025 (2,011)
Cumulative structural cost reduction (2,761)
(a) Comparative periods in 2024 have been restated for a
reclassification in costs from transportation and shipping to environmental.
Top of page 30
Reconciliation of customers & products RC profit before interest and tax
to underlying RC profit before interest and tax* to adjusted EBITDA* by
business
Fourth Third Fourth
quarter quarter quarter Year Year
$ million 2025 2025 2024 2025 2024
RC profit (loss) before interest and tax for customers & products((a)) 1,415 1,610 (1,921) 4,100 (1,043)
Less: Adjusting items* gains (charges)((a)) 69 (106) (1,619) (1,172) (3,560)
Underlying RC profit (loss) before interest and tax for customers & 1,346 1,716 (302) 5,272 2,517
products
By business:
customers - convenience & mobility 877 1,167 527 3,764 2,584
Castrol - included in customers 227 261 220 971 831
products - refining & trading 469 549 (829) 1,508 (67)
Add back: Depreciation, depletion and amortization 1,055 1,045 1,111 4,145 3,957
By business:
customers - convenience & mobility 615 619 647 2,443 2,135
Castrol - included in customers 35 48 47 179 176
products - refining & trading 440 426 464 1,702 1,822
Adjusted EBITDA for customers & products 2,401 2,761 809 9,417 6,474
By business:
customers - convenience & mobility 1,492 1,786 1,174 6,207 4,719
Castrol - included in customers 262 309 267 1,150 1,007
products - refining & trading 909 975 (365) 3,210 1,755
(a) Comparative periods in 2024 have been restated for material items to
reflect the move of our Archaea business from the customers & products
segment to the gas & low carbon energy segment.
Top of page 31
Realizations* and marker prices
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
Average realizations((a))
Liquids* ($/bbl)
US((b)) 49.08 54.02 59.66 54.54 62.78
Europe 61.84 69.15 73.64 67.65 78.60
Rest of World 66.55 67.20 73.72 69.40 79.63
bp average((b)) 56.61 60.02 65.88 61.06 70.41
Natural gas ($/mcf)
US 2.53 2.41 1.80 2.63 1.49
Europe 9.28 11.98 14.12 12.76 11.65
Rest of World 6.30 6.41 6.96 6.60 5.90
bp average 5.21 5.34 5.85 5.61 4.91
Total hydrocarbons* ($/boe)
US((b)) 35.64 38.91 41.74 39.94 42.43
Europe 59.55 69.25 76.28 69.60 75.16
Rest of World 46.70 47.62 50.18 48.94 47.92
bp average((b)) 42.79 45.00 48.44 46.36 47.28
Average oil marker prices ($/bbl)
Brent 63.73 69.13 74.73 69.10 80.76
West Texas Intermediate 59.24 65.07 70.42 64.87 75.87
Western Canadian Select 46.72 52.52 57.50 52.69 61.05
Alaska North Slope 64.02 70.07 74.28 69.67 80.24
Average natural gas marker prices
Henry Hub gas price((c)) ($/mmBtu) 3.55 3.07 2.79 3.43 2.27
UK Gas - National Balancing Point (p/therm) 75.16 79.84 106.79 88.77 83.57
(a) Based on sales of consolidated subsidiaries only - this excludes
equity-accounted entities.
(b) Fourth quarter and full year 2024 include an immaterial impact of a
prior period adjustment in the US region.
(c) Henry Hub First of Month Index.
Exchange rates
Fourth Third Fourth
quarter quarter quarter Year Year
2025 2025 2024 2025 2024
$/£ average rate for the period 1.33 1.35 1.28 1.32 1.28
$/£ period-end rate 1.35 1.34 1.25 1.35 1.25
$/€ average rate for the period 1.16 1.17 1.07 1.13 1.08
$/€ period-end rate 1.18 1.17 1.04 1.18 1.04
$/AUD average rate for the period 0.66 0.65 0.65 0.64 0.66
$/AUD period-end rate 0.67 0.66 0.62 0.67 0.62
Top of page 32
Legal proceedings
For a full discussion of the group's material legal proceedings, see pages
218-219 of bp Annual Report and Form 20-F 2024.
Glossary
Non-IFRS measures are provided for investors because they are closely tracked
by management to evaluate bp's operating performance and to make financial,
strategic and operating decisions. Non-IFRS measures are sometimes referred to
as alternative performance measures.
Adjusted EBITDA is a non-IFRS measure presented for bp's operating segments
and is defined as replacement cost (RC) profit before interest and tax,
adjusting for net adjusting items* before interest and tax, and adding back
depreciation, depletion and amortization and exploration write-offs (net of
adjusting items). Adjusted EBITDA by business is a further analysis of
adjusted EBITDA for the customers & products businesses. bp believes it is
helpful to disclose adjusted EBITDA by operating segment and by business
because it reflects how the segments measure underlying business delivery. The
nearest equivalent measure on an IFRS basis for the segment is RC profit or
loss before interest and tax, which is bp's measure of profit or loss that is
required to be disclosed for each operating segment under IFRS. A
reconciliation to IFRS information is provided on page 30 for the customers
& products businesses.
Adjusted EBITDA for the group is defined as profit or loss for the period,
adjusting for finance costs and net finance (income) or expense relating to
pensions and other post-employment benefits and taxation, inventory holding
gains or losses before tax, net adjusting items before interest and tax, and
adding back depreciation, depletion and amortization (pre-tax) and exploration
expenditure written-off (net of adjusting items, pre-tax). The nearest
equivalent measure on an IFRS basis for the group is profit or loss for the
period. A reconciliation to IFRS information is provided on page 27 for the
group.
Adjusted operating expenditure is a non-IFRS measure and a subset of
production and manufacturing expenses plus distribution and administration
expenses. It represents the majority of the remaining expenses in these line
items but excludes certain costs that are variable, primarily with volumes
(such as freight costs). Other variable costs are included in purchases in the
income statement. Management believes that adjusted operating expenditure is a
performance measure that provides investors with useful information regarding
the company's financial performance because it considers these expenses to be
the principal operating and overhead expenses that are most directly under
their control although they also include certain adjusting items*, foreign
exchange and commodity price effects. The nearest IFRS measures are production
and manufacturing expenses and distributions and administration expenses. A
reconciliation of production and manufacturing expenses plus distribution and
administration expenses to adjusted operating expenditure is provided on page
29.
Adjusting items are items that bp discloses separately because it considers
such disclosures to be meaningful and relevant to investors. They are items
that management considers to be important to period-on-period analysis of the
group's results and are disclosed in order to enable investors to better
understand and evaluate the group's reported financial performance. Adjusting
items include gains and losses on the sale of businesses and fixed assets,
impairments, environmental and related provisions and charges, restructuring,
integration and rationalization costs, fair value accounting effects and costs
relating to the Gulf of America oil spill and other items. Adjusting items
within equity-accounted earnings are reported net of incremental income tax
reported by the equity-accounted entity. Adjusting items are used as a
reconciling adjustment to derive underlying RC profit or loss and related
underlying measures which are non-IFRS measures. An analysis of adjusting
items by segment and type is shown on page 25.
Capital expenditure is total cash capital expenditure as stated in the
condensed group cash flow statement. Capital expenditure for the operating
segments, gas & low carbon energy businesses and customers & products
businesses is presented on the same basis.
Consolidation adjustment - UPII is unrealized profit in inventory arising on
inter-segment transactions.
Divestment proceeds are disposal proceeds as per the condensed group cash flow
statement.
downstream is the customers & products segment.
Excess cash is a non-IFRS measure and refers to the net of sources and uses of
cash. Sources of cash include net cash provided by operating activities, cash
provided from investing activities and cash receipts relating to transactions
involving non-controlling interests. Uses of cash include lease liability
payments, payments on perpetual hybrid bonds, dividends paid, cash capital
expenditure, the cash cost of share buybacks to offset the dilution from
vesting of awards under employee share schemes, cash payments relating to
transactions involving non-controlling interests and currency translation
differences relating to cash and cash equivalents as presented on the
condensed group cash flow statement.
Top of page 33
Glossary (continued)
Fair value accounting effects are non-IFRS adjustments to our IFRS profit
(loss). They reflect the difference between the way bp manages the economic
exposure and internally measures performance of certain activities and the way
those activities are measured under IFRS. Fair value accounting effects are
included within adjusting items. They relate to certain of the group's
commodity, interest rate and currency risk exposures as detailed below. Other
than as noted below, the fair value accounting effects described are reported
in both the gas & low carbon energy and customer & products segments.
bp uses derivative instruments to manage the economic exposure relating to
inventories above normal operating requirements of crude oil, natural gas and
petroleum products. Under IFRS, these inventories are recorded at historical
cost. The related derivative instruments, however, are required to be recorded
at fair value with gains and losses recognized in the income statement. This
is because hedge accounting is either not permitted or not followed,
principally due to the impracticality of effectiveness-testing requirements.
Therefore, measurement differences in relation to recognition of gains and
losses occur. Gains and losses on these inventories, other than net realizable
value provisions, are not recognized until the commodity is sold in a
subsequent accounting period. Gains and losses on the related derivative
commodity contracts are recognized in the income statement, from the time the
derivative commodity contract is entered into, on a fair value basis using
forward prices consistent with the contract maturity.
bp enters into physical commodity contracts to meet certain business
requirements, such as the purchase of crude for a refinery or the sale of bp's
gas production. Under IFRS these physical contracts are treated as derivatives
and are required to be fair valued when they are managed as part of a larger
portfolio of similar transactions. Gains and losses arising are recognized in
the income statement from the time the derivative commodity contract is
entered into.
IFRS require that inventory held for trading is recorded at its fair value
using period-end spot prices, whereas any related derivative commodity
instruments are required to be recorded at values based on forward prices
consistent with the contract maturity. Depending on market conditions, these
forward prices can be either higher or lower than spot prices, resulting in
measurement differences.
bp enters into contracts for pipelines and other transportation, storage
capacity, oil and gas processing, liquefied natural gas (LNG) and certain gas
and power contracts that, under IFRS, are recorded on an accruals basis. These
contracts are risk-managed using a variety of derivative instruments that are
fair valued under IFRS. This results in measurement differences in relation to
recognition of gains and losses.
The way that bp manages the economic exposures described above, and measures
performance internally, differs from the way these activities are measured
under IFRS. bp calculates this difference for consolidated entities by
comparing the IFRS result with management's internal measure of performance.
We believe that disclosing management's estimate of this difference provides
useful information for investors because it enables investors to see the
economic effect of these activities as a whole.
These include:
• Under management's internal measure of performance the
inventory, transportation and capacity contracts in question are valued based
on fair value using relevant forward prices prevailing at the end of the
period.
• Fair value accounting effects also include changes in the fair
value of the near-term portions of LNG contracts that fall within bp's risk
management framework. LNG contracts are not considered derivatives, because
there is insufficient market liquidity, and they are therefore accrual
accounted under IFRS. However, oil and natural gas derivative financial
instruments used to risk manage the near-term portions of the LNG contracts
are fair valued under IFRS. The fair value accounting effect, which is
reported in the gas and low carbon energy segment, represents the change in
value of LNG contracts that are being risk managed and which is reflected in
the underlying result, but not in reported earnings. Management believes that
this gives a better representation of performance in each period.
Furthermore, the fair values of derivative instruments used to risk manage
certain other oil, gas, power and other contracts, are deferred to match with
the underlying exposure. The commodity contracts for business requirements are
accounted for on an accruals basis.
In addition, fair value accounting effects include changes in the fair value
of derivatives entered into by the group to manage currency exposure and
interest rate risks relating to hybrid bonds to their respective first call
periods. The hybrid bonds which are classified as equity instruments were
recorded in the balance sheet at their issuance date at their USD equivalent
issued value. Under IFRS these equity instruments are not remeasured from
period to period, and do not qualify for application of hedge accounting. The
derivative instruments relating to the hybrid bonds, however, are required to
be recorded at fair value with mark to market gains and losses recognized in
the income statement. Therefore, measurement differences in relation to the
recognition of gains and losses occur. The fair value accounting effect, which
is reported in the other businesses & corporate segment, eliminates the
fair value gains and losses of these derivative financial instruments that are
recognized in the income statement. We believe that this gives a better
representation of performance, by more appropriately reflecting the economic
effect of these risk management activities, in each period.
Top of page 34
Glossary (continued)
Gas & low carbon energy segment comprises our gas and low carbon
businesses. Our gas business includes regions with upstream activities that
predominantly produce natural gas, integrated gas and power and gas trading.
From the first quarter of 2025 it also includes our Archaea business which
prior to that was reported in the customers & products segment. Our low
carbon business includes solar, offshore and onshore wind, hydrogen and CCS
and power trading. Power trading includes trading of both renewable and
non-renewable power.
Gearing and net debt are non-IFRS measures. Net debt is calculated as finance
debt, as shown in the balance sheet, plus the fair value of associated
derivative financial instruments that are used to hedge foreign currency
exchange and interest rate risks relating to finance debt, for which hedge
accounting is applied, less cash and cash equivalents. Net debt does not
include accrued interest, which is reported within other receivables and other
payables on the balance sheet and for which the associated cash flows are
presented as operating cash flows in the group cash flow statement. Gearing is
defined as the ratio of net debt to the total of net debt plus total equity.
bp believes these measures provide useful information to investors. Net debt
enables investors to see the economic effect of finance debt, related hedges
and cash and cash equivalents in total. Gearing enables investors to see how
significant net debt is relative to total equity. The derivatives are reported
on the balance sheet within the headings 'Derivative financial instruments'.
The nearest equivalent measures on an IFRS basis are finance debt and finance
debt ratio. A reconciliation of finance debt to net debt is provided on page
23.
We are unable to present reconciliations of forward-looking information for
net debt or gearing to finance debt and total equity, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to present a meaningful comparable IFRS forward-looking
financial measure. These items include fair value asset (liability) of hedges
related to finance debt and cash and cash equivalents, that are difficult to
predict in advance in order to include in an IFRS estimate.
Gearing including leases and net debt including leases are non-IFRS measures.
Net debt including leases is calculated as net debt plus lease liabilities,
less the net amount of partner receivables and payables relating to leases
entered into on behalf of joint operations. Gearing including leases is
defined as the ratio of net debt including leases to the total of net debt
including leases plus total equity. bp believes these measures provide useful
information to investors as they enable investors to understand the impact of
the group's lease portfolio on net debt and gearing. The nearest equivalent
measures on an IFRS basis are finance debt and finance debt ratio. A
reconciliation of finance debt to net debt including leases is provided on
page 26.
Hydrocarbons - Liquids and natural gas. Natural gas is converted to oil
equivalent at 5.8 billion cubic feet = 1 million barrels.
Inorganic capital expenditure is a subset of capital expenditure on a cash
basis and a non-IFRS measure. Inorganic capital expenditure comprises
consideration in business combinations and certain other significant
investments made by the group. It is reported on a cash basis. bp believes
that this measure provides useful information as it allows investors to
understand how bp's management invests funds in projects which expand the
group's activities through acquisition. The nearest equivalent measure on an
IFRS basis is capital expenditure on a cash basis. Further information and a
reconciliation to IFRS information is provided on page 24.
Inventory holding gains and losses are non-IFRS adjustments to our IFRS profit
(loss) and represent:
• the difference between the cost of sales calculated using the
replacement cost of inventory and the cost of sales calculated on the first-in
first-out (FIFO) method after adjusting for any changes in provisions where
the net realizable value of the inventory is lower than its cost. Under the
FIFO method, which we use for IFRS reporting of inventories other than for
trading inventories, the cost of inventory charged to the income statement is
based on its historical cost of purchase or manufacture, rather than its
replacement cost. In volatile energy markets, this can have a significant
distorting effect on reported income. The amounts disclosed as inventory
holding gains and losses represent the difference between the charge to the
income statement for inventory on a FIFO basis (after adjusting for any
related movements in net realizable value provisions) and the charge that
would have arisen based on the replacement cost of inventory. For this
purpose, the replacement cost of inventory is calculated using data from each
operation's production and manufacturing system, either on a monthly basis, or
separately for each transaction where the system allows this approach; and
• an adjustment relating to certain trading inventories that are
not price risk managed which relate to a minimum inventory volume that is
required to be held to maintain underlying business activities. This
adjustment represents the movement in fair value of the inventories due to
prices, on a grade by grade basis, during the period. This is calculated from
each operation's inventory management system on a monthly basis using the
discrete monthly movement in market prices for these inventories.
The amounts disclosed are not separately reflected in the financial statements
as a gain or loss. No adjustment is made in respect of the cost of inventories
held as part of a trading position and certain other temporary inventory
positions that are price risk-managed. See Replacement cost (RC) profit or
loss definition below.
Liquids - Liquids comprises crude oil, condensate and natural gas liquids. For
the oil production & operations segment, it also includes bitumen.
Major projects have a bp net investment of at least $250 million, or are
considered to be of strategic importance to bp or of a high degree of
complexity.
Top of page 35
Glossary (continued)
Operating cash flow is net cash provided by (used in) operating activities as
stated in the condensed group cash flow statement.
Organic capital expenditure is a non-IFRS measure. Organic capital expenditure
comprises capital expenditure on a cash basis less inorganic capital
expenditure. bp believes that this measure provides useful information as it
allows investors to understand how bp's management invests funds in developing
and maintaining the group's assets. The nearest equivalent measure on an IFRS
basis is capital expenditure on a cash basis and a reconciliation to IFRS
information is provided on page 24.
We are unable to present reconciliations of forward-looking information for
organic capital expenditure to total cash capital expenditure, because without
unreasonable efforts, we are unable to forecast accurately the adjusting item,
inorganic capital expenditure, that is difficult to predict in advance in
order to derive the nearest IFRS estimate.
Production-sharing agreement/contract (PSA/PSC) is an arrangement through
which an oil and gas company bears the risks and costs of exploration,
development and production. In return, if exploration is successful, the oil
company receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a stipulated share of the
production remaining after such cost recovery.
Realizations are the result of dividing revenue generated from hydrocarbon
sales, excluding revenue generated from purchases made for resale and royalty
volumes, by revenue generating hydrocarbon production volumes. Revenue
generating hydrocarbon production reflects the bp share of production as
adjusted for any production which does not generate revenue. Adjustments may
include losses due to shrinkage, amounts consumed during processing, and
contractual or regulatory host committed volumes such as royalties. For the
gas & low carbon energy and oil production & operations segments,
realizations include transfers between businesses.
Refining availability represents Solomon Associates' operational availability
for bp-operated refineries, which is defined as the percentage of the year
that a unit is available for processing after subtracting the annualized time
lost due to turnaround activity and all mechanical, process and regulatory
downtime.
Refining indicator margin (RIM) is a simple indicator of the weighted average
of bp's crude slate and product yield as deemed representative for each
refinery. Actual margins realized by bp may vary due to a variety of factors,
including the actual mix of a crude and product for a given quarter.
Replacement cost (RC) profit or loss / RC profit or loss attributable to bp
shareholders reflects the replacement cost of inventories sold in the period
and is calculated as profit or loss attributable to bp shareholders, adjusting
for inventory holding gains and losses (net of tax). RC profit or loss for the
group is not a recognized IFRS measure. bp believes this measure is useful to
illustrate to investors the fact that crude oil and product prices can vary
significantly from period to period and that the impact on our reported result
under IFRS can be significant. Inventory holding gains and losses vary from
period to period due to changes in prices as well as changes in underlying
inventory levels. In order for investors to understand the operating
performance of the group excluding the impact of price changes on the
replacement of inventories, and to make comparisons of operating performance
between reporting periods, bp's management believes it is helpful to disclose
this measure. The nearest equivalent measure on an IFRS basis is profit or
loss attributable to bp shareholders. A reconciliation to IFRS information is
provided on page 1. RC profit or loss before interest and tax is bp's measure
of profit or loss that is required to be disclosed for each operating segment
under IFRS.
Reserves replacement ratio - the extent to which the year's production has
been replaced by proved reserves added to our reserve base. The ratio is
expressed in oil-equivalent terms and includes changes resulting from
discoveries, improved recovery and extensions and revisions to previous
estimates, but excludes changes resulting from acquisitions and disposals.
Return on average capital employed (ROACE) is a non-IFRS measure. ROACE is
defined as underlying replacement cost profit, which is defined as profit or
loss attributable to bp shareholders adjusted for inventory holding gains and
losses, adjusting items and related taxation on inventory holding gains and
losses and adjusting items total taxation, after adding back non-controlling
interest and interest expense net of tax, divided by the average of the
beginning and ending balances of total equity plus finance debt, excluding
cash and cash equivalents and goodwill as presented on the group balance sheet
over the periods presented. Interest expense before tax is finance costs as
presented on the group income statement, excluding lease interest, the
unwinding of the discount on provisions and other payables and other adjusting
items reported in finance costs. bp believes it is helpful to disclose the
ROACE because this measure gives an indication of the company's capital
efficiency. The nearest IFRS measures of the numerator and denominator are
profit or loss for the period attributable to bp shareholders and total equity
respectively. The reconciliation of the numerator and denominator is provided
on page 28.
We are unable to present forward-looking information of the nearest IFRS
measures of the numerator and denominator for ROACE, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to calculate a meaningful comparable IFRS forward-looking
financial measure. These items include inventory holding gains or losses and
interest net of tax, that are difficult to predict in advance in order to
include in an IFRS estimate.
Structural cost reduction is calculated as decreases in underlying operating
expenditure* (as defined on page 36) as a result of operational efficiencies,
divestments, workforce reductions and other cost saving measures that are
expected to be sustainable compared with 2023 levels. The total change between
periods in underlying operating expenditure will reflect both structural cost
reductions and other changes in spend, including market factors, such as
inflation and foreign exchange impacts, as well as changes in activity levels
and costs associated with new operations. Estimates of cumulative annual
structural cost reduction may be revised depending on whether cost reductions
realized in prior periods are determined to be sustainable compared with 2023
levels. Structural cost reductions are stewarded internally to support
management's oversight of spending over time.
bp believes this performance measure is useful in demonstrating how management
drives cost discipline across the entire organization, simplifying our
processes and portfolio and streamlining the way we work. The nearest IFRS
measures are production and manufacturing expenses and distributions and
administration expenses. A reconciliation of production and manufacturing
expenses plus distribution and administration expenses to underlying operating
expenditure is provided on page 29.
Top of page 36
Glossary (continued)
Technical service contract (TSC) - Technical service contract is an
arrangement through which an oil and gas company bears the risks and costs of
exploration, development and production. In return, the oil and gas company
receives entitlement to variable physical volumes of hydrocarbons,
representing recovery of the costs incurred and a profit margin which reflects
incremental production added to the oilfield.
Tier 1 and tier 2 process safety events - Tier 1 events are losses of primary
containment from a process of greatest consequence - causing harm to a member
of the workforce, damage to equipment from a fire or explosion, a community
impact or exceeding defined quantities. Tier 2 events are those of lesser
consequence. These represent reported incidents occurring within bp's
operational HSSE reporting boundary. That boundary includes bp's own operated
facilities and certain other locations or situations. Reported process safety
events are investigated throughout the year and as a result there may be
changes in previously reported events. Therefore comparative movements are
calculated against internal data reflecting the final outcomes of such
investigations, rather than the previously reported comparative period, as
this represents a more up to date reflection of the safety environment.
Underlying effective tax rate (ETR) is a non-IFRS measure. The underlying ETR
is calculated by dividing taxation on an underlying replacement cost (RC)
basis by underlying RC profit or loss before tax. Taxation on an underlying RC
basis for the group is calculated as taxation as stated on the group income
statement adjusted for taxation on inventory holding gains and losses and
total taxation on adjusting items. Information on underlying RC profit or loss
is provided below. Taxation on an underlying RC basis presented for the
operating segments is calculated through an allocation of taxation on an
underlying RC basis to each segment. bp believes it is helpful to disclose the
underlying ETR because this measure may help investors to understand and
evaluate, in the same manner as management, the underlying trends in bp's
operational performance on a comparable basis, period on period. Taxation on
an underlying RC basis and underlying ETR are non-IFRS measures. The nearest
equivalent measure on an IFRS basis is the ETR on profit or loss for the
period.
We are unable to present reconciliations of forward-looking information for
underlying ETR to ETR on profit or loss for the period, because without
unreasonable efforts, we are unable to forecast accurately certain adjusting
items required to present a meaningful comparable IFRS forward-looking
financial measure. These items include the taxation on inventory holding gains
and losses and adjusting items, that are difficult to predict in advance in
order to include in an IFRS estimate.
Underlying operating expenditure is a non-IFRS measure and a subset of
production and manufacturing expenses plus distribution and administration
expenses and excludes costs that are classified as adjusting items. It
represents the majority of the remaining expenses in these line items but
excludes certain costs that are variable, primarily with volumes (such as
freight costs). Other variable costs are included in purchases in the income
statement. Management believes that underlying operating expenditure is a
performance measure that provides investors with useful information regarding
the company's financial performance because it considers these expenses to be
the principal operating and overhead expenses that are most directly under
their control although they also include certain foreign exchange and
commodity price effects. The nearest IFRS measures are production and
manufacturing expenses and distribution and administration expenses. A
reconciliation of production and manufacturing expenses plus distribution and
administration expenses to underlying operating expenditure is provided on
page 29.
Underlying production - 2025 underlying production, when compared with 2024,
is production after adjusting for acquisitions and divestments, curtailments,
and entitlement impacts in our production-sharing agreements/contracts and
technical service contract*.
Underlying RC profit or loss / underlying RC profit or loss attributable to bp
shareholders is a non-IFRS measure and is RC profit or loss* (as defined on
page 35) after excluding net adjusting items and related taxation. See page 25
for additional information on the adjusting items that are used to arrive at
underlying RC profit or loss in order to enable a full understanding of the
items and their financial impact.
Underlying RC profit or loss before interest and tax for the operating
segments or customers & products businesses is calculated as RC profit or
loss (as defined above) including profit or loss attributable to
non-controlling interests before interest and tax for the operating segments
and excluding net adjusting items for the respective operating segment or
business.
bp believes that underlying RC profit or loss is a useful measure for
investors because it is a measure closely tracked by management to evaluate
bp's operating performance and to make financial, strategic and operating
decisions and because it may help investors to understand and evaluate, in the
same manner as management, the underlying trends in bp's operational
performance on a comparable basis, period on period, by adjusting for the
effects of these adjusting items. The nearest equivalent measure on an IFRS
basis for the group is profit or loss attributable to bp shareholders. The
nearest equivalent measure on an IFRS basis for segments and businesses is RC
profit or loss before interest and taxation. A reconciliation to IFRS
information is provided on page 1 for the group and pages 6-12 for the
segments.
Top of page 37
Glossary (continued)
Underlying RC profit or loss per share / underlying RC profit or loss per ADS
is a non-IFRS measure. Earnings per share is defined in Note 7. Underlying RC
profit or loss per ordinary share is calculated using the same denominator as
earnings per share as defined in the consolidated financial statements. The
numerator used is underlying RC profit or loss attributable to bp
shareholders, rather than profit or loss attributable to bp ordinary
shareholders. Underlying RC profit or loss per ADS is calculated as outlined
above for underlying RC profit or loss per share except the denominator is
adjusted to reflect one ADS equivalent to six ordinary shares. bp believes it
is helpful to disclose the underlying RC profit or loss per ordinary share and
per ADS because these measures may help investors to understand and evaluate,
in the same manner as management, the underlying trends in bp's operational
performance on a comparable basis, period on period. The nearest equivalent
measure on an IFRS basis is basic earnings per share based on profit or loss
for the period attributable to bp ordinary shareholders.
upstream includes oil and natural gas field development and production within
the gas & low carbon energy and oil production & operations segments.
upstream/hydrocarbon plant reliability (bp-operated) is calculated taking 100%
less the ratio of total unplanned plant deferrals divided by installed
production capacity, excluding non-operated assets and bpx energy. Unplanned
plant deferrals are associated with the topside plant and where applicable the
subsea equipment (excluding wells and reservoir). Unplanned plant deferrals
include breakdowns, which does not include Gulf of America weather related
downtime.
upstream unit production costs are calculated as production cost divided by
units of production. Production cost does not include ad valorem and severance
taxes. Units of production are barrels for liquids and thousands of cubic feet
for gas. Amounts disclosed are for bp subsidiaries only and do not include
bp's share of equity-accounted entities.
Working capital is movements in inventories and other current and non-current
assets and liabilities as reported in the condensed group cash flow statement.
Change in working capital adjusted for inventory holding gains/losses, fair
value accounting effects relating to subsidiaries and other adjusting items is
a non-IFRS measure. It is calculated by adjusting for inventory holding
gains/losses reported in the period; fair value accounting effects relating to
subsidiaries reported within adjusting items for the period; and other
adjusting items relating to the non-cash movement of US emissions obligations
carried as a provision that will be settled by allowances held as inventory.
This represents what would have been reported as movements in inventories and
other current and non-current assets and liabilities, if the starting point in
determining net cash provided by operating activities had been underlying
replacement cost profit rather than profit for the period. The nearest
equivalent measure on an IFRS basis for this is movements in inventories and
other current and non-current assets and liabilities.
bp utilizes various arrangements in order to manage its working capital
including discounting of receivables and, in the supply and trading business,
the active management of supplier payment terms, inventory and collateral.
Trade marks
Trade marks of the bp group appear throughout this announcement. They include:
bp, Amoco, Aral, ampm, bp pulse, Castrol, PETRO, TA, and Thorntons
Top of page 38
Cautionary statement
In order to utilize the 'safe harbor' provisions of the United States Private
Securities Litigation Reform Act of 1995 (the 'PSLRA') and the general
doctrine of cautionary statements, bp is providing the following cautionary
statement:
The discussion in this announcement contains certain forecasts, projections
and forward-looking statements - that is, statements related to future, not
past events and circumstances - with respect to the financial condition,
results of operations and businesses of bp and certain of the plans and
objectives of bp with respect to these items. These statements may generally,
but not always, be identified by the use of words such as 'will', 'expects',
'is expected to', 'aims', 'should', 'may', 'objective', 'is likely to',
'intends', 'believes', 'anticipates', 'plans', 'we see', 'focus on' or similar
expressions.
In particular, the following, among other statements, are all forward-looking
in nature: plans, expectations and assumptions regarding oil and gas demand,
supply, prices or volatility; expectations regarding production and volumes;
expectations regarding turnaround and maintenance activity; plans and
expectations regarding bp's balance sheet, financial performance, results of
operations, cost reduction, cash flows, and shareholder returns; plans and
expectations regarding the amount and timing of dividends, share buybacks,
dividend reinvestment programs and the use of excess cash; plans and
expectations regarding bp's upstream production; plans and expectations
regarding the amount, effects, timing, quantum and nature of certain
acquisitions, divestments and related payments and proceeds, including
expectations regarding the Castrol business, the Gelsenkirchen refinery,
Lightsource bp and other bp businesses and assets subject to disposal or
divestment; plans and expectations regarding bp's net debt, credit rating,
investment strategy, capital expenditures, capital frame, underlying effective
tax rate, and depreciation, depletion and amortization; expectations regarding
bp's customers business, including with respect to volumes, earnings growth,
fuels margins and the impact of structural cost reduction; expectations
regarding bp's products, including underlying performance, industry refining
margins and refinery turnaround activity; expectations regarding bp's other
businesses & corporate underlying annual charge; expectations regarding
Gulf of America settlement payments; plans and expectations regarding the
Greater Western Flank 4 project, the Bumerangue block, the Atlantis Drill
Center 1 expansion project; and expectations regarding bp's tax liabilities
and obligations, including the future impact of German tax legislation.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will or may
occur in the future and are outside the control of bp. Recent global
developments have caused significant uncertainty and volatility in
macroeconomic conditions and commodity markets. Each item of outlook and
guidance set out in this announcement is based on bp's current expectations
but actual outcomes and results may be impacted by these evolving
macroeconomic and market conditions.
Actual results or outcomes may differ materially from those expressed in such
statements, depending on a variety of factors, including: the extent and
duration of the impact of current market conditions including the volatility
of oil prices, the effects of bp's plan to exit its shareholding in Rosneft
and other investments in Russia, overall global economic and business
conditions impacting bp's business and demand for bp's products as well as the
specific factors identified in the discussions accompanying such
forward-looking statements; changes in consumer preferences and societal
expectations; the pace of development and adoption of alternative energy
solutions; developments in policy, law, regulation, technology and markets,
including societal and investor sentiment related to the issue of climate
change; the receipt of relevant third party and/or regulatory approvals
including ongoing approvals required for the continued developments of
approved projects; the timing and level of maintenance and/or turnaround
activity; the timing and volume of refinery additions and outages; the timing
of bringing new fields onstream; the timing, quantum and nature of certain
acquisitions and divestments; future levels of industry product supply, demand
and pricing, including supply growth in North America and continued base oil
and additive supply shortages; OPEC+ quota restrictions; PSA and TSC effects;
operational and safety problems; potential lapses in product quality; economic
and financial market conditions generally or in various countries and regions;
political stability and economic growth in relevant areas of the world;
changes in laws and governmental regulations and policies, including related
to climate change; changes in social attitudes and customer preferences;
regulatory or legal actions including the types of enforcement action pursued
and the nature of remedies sought or imposed; the actions of prosecutors,
regulatory authorities and courts; delays in the processes for resolving
claims; amounts ultimately payable and timing of payments relating to the Gulf
of America oil spill; exchange rate fluctuations; development and use of new
technology; recruitment and retention of a skilled workforce; the success or
otherwise of partnering; the actions of competitors, trading partners,
contractors, subcontractors, creditors, rating agencies and others; bp's
access to future credit resources; business disruption and crisis management;
the impact on bp's reputation of ethical misconduct and non-compliance with
regulatory obligations; trading losses; major uninsured losses; the
possibility that international sanctions or other steps taken by governmental
authorities or any other relevant persons may impact bp's ability to sell its
interests in Rosneft, or the price for which bp could sell such interests; the
actions of contractors; natural disasters and adverse weather conditions;
changes in public expectations and other changes to business conditions; wars
and acts of terrorism; cyber-attacks or sabotage; and those factors discussed
under "Principal risks and uncertainties" in bp's Report on Form 6-K regarding
results for the six-month period ended 30 June 2025 as filed with the US
Securities and Exchange Commission (the "SEC") as well as "Risk factors" in
bp's Annual Report and Form 20-F for fiscal year 2024 as filed with the SEC.
Cautionary note to U.S. investors - This document contains references to
non-proved reserves and production outlooks based on non-proved reserves that
the SEC's rules prohibit us from including in our filings with the SEC. U.S.
investors are urged to consider closely the disclosures in our Form 20-F, SEC
File No. 1-06262. This form is available on our website at www.bp.com. You can
also obtain this form from the SEC's website at www.sec.gov
(http://www.sec.gov) .
This announcement contains inside information. The person responsible for
arranging the release of this announcement on behalf of BP p.l.c. is Ben
Mathews, Company Secretary.
Top of page 39
Contacts
London Houston
Press Office Rita Brown Paul Takahashi
+44 (0) 7787 685821 +1 713 903 9729
Investor Relations Craig Marshall Graham Collins
bp.com/investors +44 (0) 203 401 5592 +1 832 753 5116
BP p.l.c.'s LEI Code 213800LH1BZH3DI6G760
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