Dudley trumpets 'turning point' as BP profit gushes

 

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The Independent Online

BP has reached "a definite turning point" after suffering in the wake of the devastating Gulf of Mexico disaster, the oil giant's chief executive said yesterday as he announced plans to sell off more assets and set the company on course to increase its cashflow by 50 per cent in coming years.

Bob Dudley, who took over after Tony Hayward's departure last year, said he now planned to sell up to $45bn (£28bn) worth of assets by 2013. That is 50 per cent higher than the previous target of $30bn. The business has already agreed sales totalling $26bn as it attempts to move on from the disaster.

There are still challenges ahead, however, in the form of outstanding lawsuits connected to the spill that are scheduled to come to trial in February.

Mr Dudley said BP was open to settlements but "not at any cost".

There is also the potential for fines related to that disaster as well as ongoing legal problems in Russia.

Mr Dudley outlined plans to increase cashflow by 50 per cent – half of that will come as payments to the Gulf of Mexico trust fund come to an end – by 2014. The extra money, which assumes an oil price of $100 per barrel in 2014, lower than the recent average of $112, would allow the company to increase payouts for shareholders, he said.

The update on strategy, including plans to invest in higher-margin assets, came as BP revealed $5.14bn in third-quarter replacement cost profits, which strip out the impact of oil and gas inventories. This was an improvement on the $1.85bn seen last year, when the company made provisions for the costs related to the Gulf spill.

For the first nine months of the year, BP – which also announced company veteran Brian Gilvary would take over as chief financial officer in January – notched up $15.9bn in replacement cost profits, compared with a $9.5bn loss in the same period last year.

BP plans to pay a quarterly dividend to shareholders of 7 cents per share, roughly 4.3p. This time last year it paid nothing, in the wake of the oil spill.

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