BP to pay first dividend since oil spill

BP’s shareholders will receive an increased dividend after the petroleum giant enjoyed a strong end to last year.

The dividend will be increased for the first time since the Gulf of Mexico spill in 2010, with shareholders receiving 14 per cent more, after profits went up significantly.

Replacement cost profit for the fourth quarter of 2011, which does not include the effect of oil and other price movements, was $7.6bn (£4.8bn), up from $4.6bn at the same point in 2010. BP’s profit for the year of 2011 was $23.9bn, comparing favourably to a $4.9bn loss in the previous year.

The company’s dividend was increased to eight cents per share for the final three months of 2011. But even with the rise, the dividend is barely half what it was before the oil spill.

BP group chief executive Bob Dudley said strong cash flow generation in 2011 and a return of momentum to operations had boosted the company’s confidence in getting value for shareholders.

Dudley said: “BP is on the right path, working to grow value through the 10-point plan we laid out in October. Above all, we have a relentless focus on safety and risk management. And 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.”

BP suspended dividend payments to shareholders for the first time in 60 years after coming under severe political pressure following the Deepwater Horizon disaster.

The legal liabilities of the Gulf of Mexico oil spill continue to weigh down on its shares, with some analysts predicting BP will agree a financial settlement with the US government.

Dudley said: “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.”

BP wants contractor Halliburton to pay for the damages that were caused by the spill and the trial between the two parties is expected to begin in the coming weeks. BP has paid $8.8bn in damage claims so far.

The high price of oil helped to boost BP’s profits. It remained around the $100 a barrel mark during the final quarter of last year.

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