Belfast Telegraph

Monday 21 April 2014

BP moves to put distance between it and Deepwater crisis

Bp's recovery in the wake of the fatal Gulf of Mexico oil spill disaster gathered pace as it surprised investors with a bigger-than-expected hike to its dividend.

After rising nearly 60% since the April 2010 Deepwater Horizon explosion, BP shares added another 5% today as it lifted its quarterly shareholder payout by 12.5% to US9c (5.6p) a share.

The share performance is watched closely as in the past BP has accounted for around one pound in every six invested by pension schemes. BP suspended its dividend in the aftermath of the oil spill, restoring it in February 2011 and increasing it this year.

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said if progress is maintained the company "may well regain its former glories".

Although BP reported a 5% drop in underlying replacement cost profit to $5.2bn (£3.2bn) in its third quarter, the figure was still ahead of expectations.

The fall in profits came as production of oil and gas, excluding its recently-sold stake in Russian joint venture TNK-BP, dipped 3% to 2.26 million barrels of oil a day.

But the group reassured investors that its production will rise in the fourth quarter as the maintenance season ends.

Chief executive Bob Dudley hailed "strong progress" at the company, which was "laying the right foundations for sustainable growth during the coming decade".

BP has sold off large chunks of its business as part of its pledge to raise cash to pay the costs of the 2010 disaster. It has recently sold a Texas City refinery, five oil and gas fields in the US Gulf of Mexico and its Bristol-based liquefied petroleum gas distribution arm.