UK: Dividend up as BP profits slip
Oil giant BP cheered investors today as it unveiled a higher quarterly dividend, despite profits coming under pressure as its far-reaching disposal plan hit production.
The British supermajor reported underlying replacement cost profit of 5.2 billion US dollars (�3.2 billion), compared to 5.5 billion US dollars (�3.4 billion) in the same quarter last year.
The slide 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 chief executive Bob Dudley said the results showed “strong progress” as he announced a 12.5% hike in its quarterly dividend to 9 US cents (5.6p) a share. Shares surged more than 3% to 440p today.
On a quarter-by-quarter basis, underlying replacement cost profit was 40% higher as it benefited from better refining margins in its downstream business.
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BP has sold off large chunks of its business as part of its pledge to raise cash to pay the costs of the 2010 Deepwater Horizon disaster.
While the TNK-BP exit fell outside this pledge, 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 (LPG) distribution arm.
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