Pension funds celebrate as BP ups its dividend
BP brought cheer to Britain's pension funds yesterday as the oil giant hiked its quarterly dividend by 14 per cent.
The increase – of 1 cent to 8 cents (5.1p) a share – is the first time BP has raised its dividend since it was reinstated a year ago following a six-month suspension as it struggled with the financial fallout from the Gulf of Mexico spill.
However, even with the hike, BP's dividend is barely half what it was at its peak before the disaster in April 2010, when shareholder payouts accounted for £1 in every £6 of dividends paid to UK pension funds.
The increase came as BP unveiled annual results which, it said, put it "back on the right path", after several disappointments including the oil spill and a failed tie-up in the Russian Arctic.
BP reported a profit of $25.7bn for 2011, compared to a $3.7bn loss last year, as costs associated with the spill dragged it into the red.
For the fourth quarter, BP reported a 38 per cent jump in profit to $7.6bn, compared to the year-earlier period, as the group benefited from a high oil price.
Bob Dudley, BP's chief executive, said: "2012 will be a year of increasing investment and milestones as we build on the foundations laid last year."
BP disappointed some shareholders by not announcing any further settlements relating to claims stemming from the oil spill. Furthermore, the company said it had raised its estimate for the total cost of the spill by $1.8bn in 2011 to $43bn, reflecting an expected rise in the costs of cleaning up the shoreline and a new $500m charge related to legal costs in 2012.
The company is preparing for a major trial in New Orleans at the end of the month to determine liability for the spill, although Mr Dudley said he is still hopeful a settlement could be reached with the US Department of Justice.
"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," Mr Dudley said.
Separately, BP announced that it plans to sell its LPG (liquefied petroleum gas) bottles and tank filling operations in the UK, Portugal, Austria, Poland, the Netherlands, Belgium, Turkey, China and South Africa, as part of its programme to sell businesses to pay compensation claims.
Shares in BP were flat, as investor enthusiasm about the dividend hike was tempered by concern about costs relating to the oil spill.
BP said it expected to drill 12 exploration wells in the coming year, more than twice the number during 2011.
Last month, BP surprised the market when the oil giant revealed it signed 80 exploration contracts last year, more than at any time since the late 1980s, despite the damage to its reputation inflicted by the Gulf of Mexico oil spill in 2010.
The contracts span 11 countries, including the Gulf of Mexico and the North Sea, and cover an area the size of Italy.
- 1 Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Driving while dehydrated can be just as dangerous as drink driving, study suggests
- 4 Ben Affleck asked TV chiefs to hide slave-owning ancestry, new hacked Sony emails published by Wikileaks claim
- 5 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Professional big game hunter Ian Gibson crushed to death by elephant during hunt
Ben Affleck asked TV chiefs to hide slave-owning ancestry, new hacked Sony emails published by Wikileaks claim
Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...