BP PLC

What they do

BP operates in two segments: Gas & Low Carbon Energy and Oil Production & Operations, with marketing entities under Customers & Products. The company's upstream activities include oil and natural gas exploration, development, and production, primarily in the North Sea, the US Gulf of Mexico, and other international basins. Downstream operations include refining, marketing, and trading of petroleum products, as well as biofuels, convenience retail, and lubricants. BP also develops low carbon energy projects, including wind, solar, and hydrogen.

Revenue drivers

• Oil Production & Operations — Generates revenue from crude oil and natural gas production, with output affected by field decline, divestments, and new project startups. This is the largest upstream segment by revenue.
• Gas & Low Carbon Energy — Includes natural gas production, liquefied natural gas (LNG) trading, and low carbon energy (e.g., biogas, hydrogen, wind, solar). Revenue is driven by gas prices and LNG demand.
• Customers & Products — Comprises marketing and trading of fuels, lubricants, and petrochemicals, plus convenience retail operations. Revenue derives from product sales volumes and refinery margins.

Recent performance

In 2025, BP reported a total revenue of $201.6 billion, down from $213.9 billion in 2024 and $215.7 billion in 2023. Underlying replacement cost profit was $6.2 billion in 2025, compared to $8.9 billion in 2024. Operating cash flow for 2025 was $24.7 billion, down from $28.1 billion the prior year. Net debt at year-end was $29.4 billion, up from $22.9 billion in 2024.

Strategy

BP's strategy is to transition from an international oil company to an integrated energy company, focusing on disciplined investment in hydrocarbons to fund growth in low carbon energy. The company plans to invest $1.5-2.0 billion in low carbon energy in 2026, scaling up in biogas, hydrogen, and renewables. Management has set targets to reduce oil and gas production by 2030 and grow low carbon energy earnings. BP also emphasizes capital discipline, aiming for a 20-30% reduction in capital spending by 2026, and prioritizes shareholder returns through dividends and share buybacks.

Risks

• Oil and gas price volatility — BP's earnings and cash flow are highly sensitive to changes in crude oil and natural gas prices, which are subject to global supply-demand dynamics and geopolitical events.
• Energy transition execution risk — BP's pivot to low carbon energy involves significant investments in unproven technologies and markets, which may not deliver expected returns or face slower-than-anticipated adoption.
• Operational and safety incidents — As a large operator, BP faces risks from process safety failures, environmental accidents, and natural disasters, which can cause production losses, liabilities, and reputational damage.
• Regulatory and legal exposure — BP is subject to climate-related lawsuits, emissions regulations, and changes in tax regimes, which could increase costs or restrict operations.

Outlook

Management expects capital expenditure in 2026 to be in the range of $13-15 billion, with a focus on high-margin upstream projects and low carbon scaling. BP projects underlying production growth in 2026, driven by new projects in the Gulf of Mexico and elsewhere. The company aims to reduce net debt to the lower end of its $30-35 billion target range by 2026. BP also plans to continue its dividend and buyback program, with a target of $2 billion per quarter in buybacks.