Oil giant BP hiked its dividend for the second time in six months as it continues to deal with the wake of the 2010 Gulf of Mexico disaster.
Chief executive Bob Dudley once again pledged “increasing distributions to our shareholders” as a reward for backing the oil giant in the wake of the Deepwater Horizon explosion, which killed 11 workers and battered BP’s stock and reputation.
The dividend was increased even though profits in the first three months of 2014 were just $3.53 billion (£2.1 billion) against $16.86 billion in the same period last year.
However, the figure for 2013 was boosted by BP’s $12.5 billion sale of its share in Russian joint venture TNK-BP.
Revenue was also down heavily as a result of the sale, from $107.21 billion to $92.99 billion.
BP was one of the darlings of the City until 2010 because of its large and dependable dividend. But this was suspended in the wake of the giant oil spill, and Dudley has been trying to rebuild the trust of the Square Mile by gradually returning the dividend to something close to its former strength.
Today, the payout was increased by 8.3% to 9.75p for January to March, a move bolstered by news that BP was nearing the completion of an $8 billion share repurchase programme announced last year.
“This is a very solid start to 2014,” said Dudley, who added: “As well as progressive growth in the dividend per share, we expect to use surplus cash to support further distributions through share buybacks or other mechanisms.”
BP yesterday had to reiterate that it was “committed” to Rosneft, the Russian energy group in which it holds a 20% stake as a result of an audacious $27 billion deal in 2012.
The US has placed sanctions on Rosneft president Igor Sechin which could stop Dudley, a US citizen, from dealing with him.