BP Plc shares fell nearly 6% in London trading after the oil and gas giant said its board has suspended share buybacks to allocate excess cash to strengthening the balance sheet and has withdrawn guidance to return 30% to 40% of operating cash flow to shareholders.

In an earnings report released earlier, BP said it is suspending share buybacks, ending its $750 million quarterly repurchase program.

"The board has decided to suspend the share buyback and fully allocate excess cash to accelerate strengthening of our balance sheet," the oil and gas giant said, adding, "This creates a strong platform to invest with discipline into our distinctive deep hopper of oil & gas opportunities."

The board's move to scrap share buybacks and prioritize balance sheet health makes BP the only top-five oil major without an active repurchase program.

CFO Kate Thomson said in an interview that a decision to restart the quarterly repurchase program depends on incoming CEO Meg O'Neill, who takes over in April.

BP also withdrew its guidance that shareholder distributions would be around 30% to 40% of operating cash flow and said 2026 spending will come in at the low end of its prior guidance.

The fourth quarter capped a volatile year for the company, with shares still languishing and yet to break above their 2023 highs. Tuesday's news sent the stock down about 5.7% in London.

Bloomberg noted that in the fourth quarter, activist investor Elliott Investment Management was pushing for drastic change, culminating in Chairman Albert Manifold ousting CEO Murray Auchincloss.

The shakeup at BP comes after it pulled back from failed green ventures and refocused BP on its core oil and gas business.

The shift was correct, but "increased rigor and diligence are required to make the necessary transformative changes to maximize value for our shareholders," Chairman Manifold told investors in late 2025.

Barclays Plc analyst Lydia Rainforth told clients earlier that the "story for BP from here is about the focus on rebuilding trust in capital allocation."

At UBS, analyst Josh Stone maintained his "neutral" rating on the stock.