Honeymoon period for new BP boss won’t last long
The clearing of the decks continues apace at BP.The last chief executive, Murray Auchincloss, got the heave-ho in December.Last month brought news of hefty write-downs on the troublesome low-carbon energy assets in solar and biogas.Now comes an admission that the current debt-reduction measures aren’t enough to ease the strain on an over-extended balance sheet.Share buy-backs are being suspended.
Buy-backs have become the essential symbol of financial virility in today’s oil industry.At the right price, they represent an efficient use of excess capital and are a way for managements to send obligatory signals about “financial discipline”, meaning refraining from empire-building adventures.Thus it was significant that Shell last week sustained its 17th consecutive quarter of at least $3bn of buy-backs, allowing debt to rise even as profits fell.The company was saying it can handle, for now, a spell of lower oil and gas prices.At BP, by contrast, buy-backs are already deemed an unaffordable luxury.
The decision is probably sensible in the short-term for three reasons.First, BP’s balance sheet, measured by financial gearing, is the weakest among the big oil majors.Debt, on the most generous metric, is $22bn.So best to save $6bn a year by “fully allocating” excess cash to the reduction effort.It is simpler than waiting for receipts from disposals, notably the 65% share of Castrol, to arrive.
Second, there is little relief in sight from markets: annual profits for 2025 were $7.5bn, down from $9bn, reflecting a 20% drop in the price of oil.Third, the new chief executive, Meg O’Neill, will arrive in April, so let her start with a free hand.The market didn’t like the decision – especially the refusal to commit to restarting buy-backs once debt is within the target range of $14bn to $18bn – but it cannot be surprised.Shares fell 6%.
But it does all add to the mystery over what the reign of O’Neill and new-ish chair, Albert Manifold, will bring,The only certainty is more oil and gas projects,BP started seven in the past year and has its large Bumerangue discovery 250 miles off the coast of Brazil in the wings,So it is conceivable that BP, having signalled chunky cuts in fossil fuel production during the green-tinged era of Bernard Looney, will veer to the opposite extreme of keeping output at roughly the current level of 2,3bn barrels a day all the way until 2035.
The talk now is about the “deep hopper of oil and gas opportunities”,One constituency of shareholders – those who hated the dabbling in renewables and thought BP should stick to what it knows – will applaud the new direction,But one suspects even they will want clarity sharp-ish from O’Neill on what else follows,If BP is now all-in on oil and gas, is there any point in keeping a rump interest in solar and biogas? Could those assets be sold? And perhaps the electric vehicle charging assets and the global chain of petrol stations could be added to the mix, which might create a bigger and cleaner parcel for a demerger,Most of all, though, investors will want to know what’s coming their way in terms of cash, after the churn of capital expenditure, cost-cutting and disposals.
It’s one thing to “retire” – as BP did on Tuesday – guidance that 30-40% of operating cashflow will go to shareholders in the form of dividends or share buy-backs.But something has to be put in its place.How low does debt have to go before the balance sheet is judged safe? What oil price is required to allow share purchases to resume? BP shareholders, whatever strategic camp they’re in, love the hard clarity of dividends and buy-backs.O’Neill’s honeymoon period won’t last long.
Alistair Carns: Labour’s ex-marine who ‘would be a nightmare’ for the Tories
He is the ex-special forces colonel talked of by some in Labour as the dark horse answer to the party’s leadership angst, even if Alistair Carns might not welcome all of the endorsements coming his way.“He’s one of the most capable individuals on the Labour benches and would be an absolute nightmare to face,” said one Conservative MP familiar with the abilities of the veterans minister, who was cast at the weekend in reports as a “decisive man of action”.Carns is a former Royal Marine commando and was later military adviser to three defence secretaries at the Ministry of Defence. He was tipped as a future chief of the defence staff prospect, and there was surprise when the Scot suddenly resigned to run as a Labour candidate, winning the safe seat of Birmingham Selly Oak in 2024.He was appointed minister for the armed forces in September 2025 and has earned praise for quiet stewardship of a portfolio also encompassing issues ranging from homeland defence to support for Ukraine
Ministers warned not to copy Wes Streeting’s release of messages with Peter Mandelson
Ministers have been warned not to publish their messages with Peter Mandelson after Wes Streeting released his private WhatsApp exchanges with the disgraced former ambassador.In a message to officials, the Cabinet Office is understood to have said members of government should not share material that could be covered by a Commons motion forcing the release of documents relating to Mandelson’s appointment as US ambassador.The Met police are investigating alleged misconduct in a public office following claims that Mandelson passed market sensitive information to Jeffrey Epstein when he was business secretary in Gordon Brown’s government in 2009.The Met police issued a statement on Tuesday saying it was “vital due process is followed” so as not to jeopardise its investigation.In an effort to draw a line under his relationship with Mandelson, Streeting published dozens of messages that the pair exchanged between August 2024 and October 2025
UK signed deals with US firms that were clients of Mandelson lobbying company
A lobbying firm co-owned by Peter Mandelson worked for OpenAI before the US tech company signed a wide-ranging agreement with the UK government to explore deploying AI in Britain’s justice, security and education systems.In 2024, the $500bn-valued maker of ChatGPT was a client of Global Counsel, which Mandelson co-founded and part-owned. Keir Starmer subsequently appointed Mandelson as ambassador to Washington.OpenAI last summer signed a memorandum of understanding with the UK government to develop partnerships “to expand public engagement with AI technology”.In September it signed another deal to provide 2,500 ChatGPT licences to UK civil servants, starting in the Ministry of Justice
Who could fill key No 10 vacancies – and win the battle for Starmer’s ear?
With three vacancies opening up at the very top of Keir Starmer’s operation, there is already a battle over who will win the war for his ear – and the direction of the government.The departure of Starmer’s most important political advisers – his chief of staff, Morgan McSweeney, who was focused on the fight against Reform in Labour’s working-class heartlands; and Tim Allan, the director of communication, considered a Blairite – has immediately raised hopes on Labour’s soft left of a shift in their favour.At the same time, Starmer’s decision to get rid of the bureaucratic Chris Wormald as cabinet secretary has opened the door for a more radical replacement to drive through some of the Whitehall reforms and policy changes the prime minister has been calling for.The frontrunner for cabinet secretary is understood to be Antonia Romeo, the dynamic permanent secretary of the Home Office, who has impressed Shabana Mahmood, but other possible names floated include Minouche Shafik, Starmer’s economic adviser, and Louise Casey, the lead non-executive director for the government, who has previously said she would not be suited to the job.The one thing that everyone around Starmer agrees on is that the current void in Downing Street cannot be allowed to continue for long
Starmer says he ‘will never walk away’ as Burnham joins Labour figures backing PM – as it happened
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