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.
peopleContenders for Time magazine's Person of the Year are a mixture of the good, the bad and the holy
newsAs the world remembers Mandela the hero, the prison where he spent 27 years seems all the more brutal
tvSteven Moffat reveals the actor was dying to take on the role of the Time Lord and says he is excited to see what he will do with the character
sportBayern Munich 2 Manchester City 3: City come from two down to beat reigning European Champions
arts + ents... and a chance to paint Booker Prize winning author Hilary Mantel
danceUnder Tamara Rojo's inspired direction, it seems possible that it could challenge the dominance of the Royal Ballet. We meet some established names and rising stars
travelDiscover Uruguay's jet-set beach resort, an Atlantic enclave with plenty of art and culture to explore on the side
The ten coldest places on Earth
Sir Ian McKellen hits back at Damian Lewis' 'fruity actor' claims
Kenyan politician Mike Sonko left red-faced after photoshopping himself next to Nelson Mandela
Krokodil in Mexico? Teenager hospitalised after 'injecting drug into her genitals'
Nelson Mandela memorial: Cheers, jeers and a masterclass from Barack Obama that stole the show
- 1 Mountain goats' miraculous escape from avalanche captured in dramatic video footage
- 2 It’s shameful that our universities have accepted gender segregation under pressure from the most oppressive religious fanatics
- 3 Sir Ian McKellen hits back at Damian Lewis' 'fruity actor' claims
- 4 Kenyan politician Mike Sonko left red-faced after photoshopping himself next to Nelson Mandela
- 5 Selfie at funeral: Cameron squeezes in on Obama snap at Mandela memorial
- < Previous
- Next >
iJobs Money & Business
£70000 - £90000 per annum + benefits + bonus: Pro-Recruitment Group: Our leadi...
£50000 - £65000 per annum + BONUS + BENEFITS: Harrington Starr: A leading mark...
£60000 - £85000 per annum + BONUS + BENEFITS: Harrington Starr: A leading asse...
£45000 - £70000 per annum + Bonus + Benefits: Harrington Starr: Technical Impl...