BP’s recovery in the wake of the Gulf of Mexico oil spill disaster gathered pace yesterday as it surprised investors with a bigger-than-expected hike to its dividend.
After rising nearly 60% since the Apr 2010 Deepwater Horizon explosion, BP shares added another 5% yesterday as it lifted its quarterly shareholder payout by 12.5% to $0.09 a share.
BP suspended its dividend in the aftermath of the oil spill, restoring it in Feb 2011 and increasing it for the first time in February of this year.
Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said if similar progress is maintained the company “may well regain its former glories”.
Although BP reported a 5% drop in underlying replacement cost profit to $5.2bn (€4bn) in its third quarter, the figure was still ahead of expectations,
The fall in profits came as production of oil and gas, excluding its recently sold stake in the Russian joint venture TNK-BP, dipped 3% to 2.26m barrels of oil a day.
However, the group reassured investors that its production will rise in the fourth quarter as the maintenance season comes to a close.
Chief executive Bob Dudley hailed “strong progress” at BP, which was “laying the right foundations for sustainable growth during the coming decade”.
BP has sold off large chunks of its business as part of its pledge to raise cash to pay the costs of the 2010 Deepwater Horizon disaster.
It has recently sold a Texas City refinery, five oil and gas fields in the US Gulf of Mexico, and its Bristol-based liquefied petroleum gas distribution arm.
In the upstream business, BP said performance was similar to the second quarter as increased production from new projects and completion of turnarounds in the Gulf of Mexico was offset by seasonal maintenance in the North Sea and Alaska.
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