BP(US:BP)2026-02-10 08:32Financial Data and Key Metrics Changes - In 2025, total underlying replacement cost profit was $7.5 billion, supported by high upstream plant reliability and refining availability despite a weaker oil price environment [3] - Operating cash flow reached $24.5 billion, with a $2.9 billion adjusted working capital build during the year [3] - Capital expenditure was reduced by 10% compared to 2024, with organic CapEx at $13.6 billion [3] - Return on average capital employed increased to around 14% in 2025 from 12% in 2024 [8] Business Line Data and Key Metrics Changes - In Gas & Low Carbon Energy, the underlying result was $1.4 billion, down from $1.5 billion in the third quarter due to lower realizations [8] - Oil Production & Operations reported an underlying result of $2 billion, down from $2.3 billion in the third quarter, impacted by lower realizations and production mix [8] - In Customers, the underlying result decreased to $900 million from $1.2 billion in the third quarter, reflecting seasonally lower volumes [9] - Products segment maintained an underlying result of $500 million, with stronger refining margins offset by lower throughput due to higher turnaround activity [9] Market Data and Key Metrics Changes - The company reported a reserves replacement ratio of 90%, up from an average of around 50% in the previous two years [4] - The initial estimate of the Boomerang discovery indicates approximately 8 billion barrels of liquids in place, with plans for an appraisal program to start by year-end [5] Company Strategy and Development Direction - The board decided to suspend share buybacks to prioritize strengthening the balance sheet, creating a more resilient platform for disciplined investments [4] - The company aims to high-grade its portfolio and has increased its structural cost reduction target to $5.5 billion-$6.5 billion by 2027 [7] - The strategic review of Castrol led to the decision to sell a 65% shareholding, expected to generate around $6 billion in net proceeds to reduce net debt [5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the tragic loss of four colleagues in 2025, emphasizing an unwavering commitment to safety [2] - The company expects reported upstream production to be broadly flat in the first quarter of 2026, with underlying production slightly lower for the full year [13] - Guidance for capital expenditure in 2026 is projected to be in the range of $13 billion-$13.5 billion, with divestment proceeds expected to be between $9 billion-$10 billion [15] Other Important Information - The company reported a fourth quarter IFRS loss of $3.4 billion due to impairments primarily related to transition businesses [11] - Operating cash flow for the fourth quarter was $7.6 billion, with a cash conversion improvement of 6 percentage points [12] Q&A Session Summary Question: What are the expectations for production in 2026? - Management expects reported upstream production to be broadly flat, with underlying production slightly lower than in 2025 [13] Question: How is the company addressing safety concerns? - The company has taken decisive actions to enhance safety protocols following tragic incidents, including stopping roadside assistance next to active traffic lanes [2] Question: What is the outlook for capital expenditures? - Capital expenditure for 2026 is expected to be in the range of $13 billion-$13.5 billion, with a focus on maintaining capital discipline [15]