75% of BP’s disposal losses & impairments since 2020 down to oil and gas

75% of BP's disposal losses and impairments have come from its oil and gas business over the past five years, a new analyst note by ACCR finds, challenging the common narrative that the company’s renewables investments are the main driver of its underperformance.

The note comes ahead of BP’s Q4 2025 earnings tomorrow, where the oil and gas major is expected to report impairments of $4-5 billion in its transition business. While these impairments are material, this represents less than 10% of BP’s disposal losses and impairments since 2020.

Most of the impairments since 2020 relate to either project cost overruns and delays, or the company’s exit from its Russian oil business, the research finds. Effective project execution is critical for projects to be delivered on budget.

Last week, institutional investors filed a shareholder resolution calling on the company to demonstrate how its surge in upstream spending, announced last year in its strategic reset, will deliver value for shareholders. Part of the resolution asks BP to disclose how it accounts for cost overruns and delays in project schedules, and how they are integrated into the investment framework, given the poor historical track record across the industry.

Today’s note is consistent with past ACCR research showing that value in the oil and gas sector has been materially eroded by its upstream investments. For example, BP’s $22 billion investment in new conventional oil and gas projects over the past six years has only created $0.9 billion in shareholder value under forward prices.

The note can be viewed in full here.

Nick Mazan, Oil & Gas Sector Strategy Lead, ACCR, said:

“BP seems to be pointing to a cracked window while the foundation of the house is quietly sinking. The attention given to the recent impairments in BP's transition business is misdirected, when the upstream business deserves just as much discredit. Increasing capex in an underperforming business like oil and gas makes little sense to investors who would benefit more from the company showing capital discipline across its whole business, not just renewables, especially at a time when the demand outlook for oil and gas is so uncertain, and supply is expected to outstrip demand over the coming few years.”