BP hikes dividend despite fall in oil prices and weakness in Russian rouble

Crude oil has dived more than 20% since the summer to hit profits

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The Independent Online

BP cheered the City with a rise in dividend even after the FTSE 100 giant reported falling oil prices and a tumbling Russian rouble took a toll on profits.

BP shrugged off the turbulence with a 5.3 per cent dividend hike, taking the quarterly payout to 10 cents a share, despite profits for the July-September quarter sliding 19 per cent to $3 billion (£1.86 billion).

Crude oil is down more than 20 per cent since the summer, while the falling rouble dragged down the contribution of its 20 per cent stake in the Russian oil giant Rosneft.

BP’s shares perked up 4.45p, or 1 per cent, to 434.7p on the higher dividend, despite the profit decline. The group reported profits of just $110 million from its Rosneft stake during the period, compared with $808 million last time.


BP chief executive Bob Dudley remained upbeat, saying: “BP’s operational momentum continues to deliver results.

“Growing underlying production of oil and gas and a good downstream performance generated strong cash flow in the third quarter, despite lower oil prices. This keeps us well on track for our targets for 2014,” he said.

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BP has bought back $10 billion worth of stock in its share buyback programme.

Fellow FTSE 100 oil and gas player BG Group also reported a slide in third-quarter profits today, a 29 per cent drop to $759 million. The decline was the result of falling output, higher costs and lower oil and gas prices.

It underlines the challenge ahead for Helge Lund, who was appointed chief executive this month, lured from Norway’s Statoil by a £12 million “golden hello” and the possibility of annual earnings of £13.5 million if he hits all his targets.

Interim executive chairman Andrew Gould said: “We have made good progress with our key projects in the quarter and delivered a solid set of results.

“Helge’s track record in building a world-class exploration and production portfolio speaks for itself,” he added.

Shares in BG fell by 13p, or 1.25 per cent, to 1030p