BP raises dividend as Q3 profit swells 5 percent
LONDON — Oil company BP is rewarding long-suffering shareholders with a substantial dividend increase just days after it sold a stake in a Russian joint venture for billions of dollars.
BP also revealed Tuesday that it made a net profit of $5.5 billion in the third quarter, more than offsetting the $1.34 billion loss reported in the previous three months when the company wrote down the value of some assets. It was also 5 percent higher than last year’s equivalent of $5.2 billion.
Most interest came with the news that BP was raising its quarterly dividend 12.5 percent to 9 cents per share. The company’s shares were up 3.4 percent to 439.3 pence in early trading in London.
“BP’s performance and the strong progress we are making in transforming the company give us the confidence to increase distributions to our shareholders,” said Chief Executive Bob Dudley.
“We are on track with our strategy to 2014 and are laying the right foundations for sustainable growth during the coming decade.”
Last week, BP announced it was selling its 50 percent share in Russian oil company TNK-BP to state-controlled rival Rosneft for $17.1 billion cash and a 12.84 percent stake in Rosneft. BP also agreed to buy a further 5.66 percent stake in Rosneft for $4.8 billion.
“I believe our agreement will remove considerable uncertainty for our shareholders about BP’s future in Russia and will secure for BP a valuable and truly distinctive position in one of the world’s largest and most important oil and gas provinces,” Dudley said.
BP has faced a difficult few years ever since a big and costly oil spill in the Gulf of Mexico in April 2010. The company booked another $59 million in costs related to the spill in the third quarter, raising the nine-month total to $882 million.
BP said it expects to make the final payment this year into a $20 billion trust fund to compensate losses from the Macondo well blowout, in which 11 people died. Since the disaster in 2010, BP has announced disposals of assets valued at $35 billion toward its goal of $38 billion.
Elsewhere, BP said its replacement cost profit, a key industry benchmark, during the period was $4.7 billion, down from $5.3 billion a year earlier. It blamed lower oil prices and production and higher costs. Revenue of $93.1 billion was also down from $97.7 billion a year earlier.
Production of oil and gas, excluding TNK-BP, was down 3 percent compared to a year ago at 2.26 million barrels a day. BP said it expects higher production in the fourth quarter as its maintenance season ends and new projects make a contribution.