BP increases dividend as profits hit $23.9bn
BP increased its dividend for the first time in a year, as the oil giant recovered from the losses caused by the Gulf of Mexico disaster to post profits for 2011 of $23.9bn (€18.1bn).
The 14pc dividend rise - taking payments to 8 cents per share - was the first increase since BP reinstated the payments it suspended during the oil spill.
The welcome news for shareholders came as the oil major reported full-year profits of $23.9bn, compared with the $4.9bn loss it made in 2010 - the year of the accident that killed 11 men and spilled millions of barrels of crude into the Gulf.
The profits are reported on the oil industry's standard 'replacement cost profit' measure, which strips out changes in the value of the inventory.
The results also put BP's profits well above those of 2009, edging closer to the levels of $25.6bn last seen in 2008. However the dividend is still has a long way to go before it returns to the 14 cents a share that was paid out before the disaster..
In its fourth quarter results, BP narrowly beat analysts' expectations, reporting underlying replacement cost profit - excluding exceptional items such as last year's settlement with Anadarko over the spill - of $4.99bn, against consensus forecast of $4.87bn.
It was also slightly above the fourth quarter earnings of rival Royal Dutch Shell, which reported $4.85bn last week after being hit by losses in the refining and marketing division.
Analysts had been divided over whether BP would increase its dividend, with many correctly predicting the 1c rise but some forecasting BP more likely to hold at 7 cents, as a hefty dividend increase could have looked politically unwise ahead of the trial into claims relating to the Gulf of Mexico disaster, which is due to begin on February 27.
BP's chief executive Bob Dudley reiterated his position that the company would settle the claims - but not at any price. “As I have said before, we are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial," he said.
Mr Dudley said BP was "on the right path" and would stick to the strategic 10-point plan he set out in October, when he hailed a "turning point" for the company with plans to increase shareholder returns, divest non-core assets and increase cashflow.
"We are playing to our strengths – investing in exploration, deep water, gas value chains, giant fields and a world-class downstream, while actively managing our portfolio to grow value," he said.
Mr Dudley, who had described 2011 as a "year of consolidation", said: "2012 will be a year of increasing investment and milestones as we build on the foundations laid last year".
He said key milestones for 2012 would include doubling the number of exploration wells drilled, having eight rigs operating in the Gulf of Mexico by the end of the year, and completing payments into the Gulf of Mexico trust fund.
Stuart Joyner, oil analyst at Investec, wrote: "We continue to believe that BP will settle sooner rather than later given the US presidential election and we see a 50pc chance this will occur in the next few weeks."
Shares were broadly flat in morning trading, falling 0.95p - 0.19pc - to 488.6p.