View the article online at http://citywire.co.uk/money/article/a467765
BP resumes dividend payments as 4Q profits jump 33%
BP will pay its shareholders a dividend of 7 cents per share, even though the group made a $4.9 billion loss in the year as a whole after costs related to the Gulf of Mexico oil spill.
Beleaguered oil giant BP has said it will start paying a dividend to shareholders again after higher oil and gas prices lifted its profits by a third in the closing months of 2010.
BP will pay its shareholders 7 cents per share for the quarter, even though the group made a $4.9 billion loss in the year as a whole after costs related to last year's explosion at a rig off the coast of the US which killed 11 workers.The new dividend level is half the pre-disaster quarterly payments of 14 cents per share.
The group said it had set aside $40.9 billion to pay for costs linked to the spill in the Gulf of Mexico.
Shares fell more than 1.3% in opening deals, down 6.45p at 478.3p as the group's performance came in shy of market expectations.
For the final quarter of 2010, BP reported a replacement cost profit of $4.61 billion, a 33% increase on last year's level.
That reflects the much higher prices it received for its oil and gas output, up 15% and 6% respectively, which BP said more than made up for the much lower levels of production in the period.
But analysts had been looking for a profit figure closer to $5 billion for the quarter.
Production for the quarter was 9% lower than a year earlier, partly reflecting the continued impacts to Gulf of Mexico production as a result of the drilling moratorium in the area.
BP said production at the beginning of 2011 will reflect the continued impact from disposals, and the continued lack of drilling activity in the Gulf of Mexico among other things. But the company said that will be partly offset by the group's first production from Iraq.
To help pay for the potential costs of the Gulf of Mexico spill, BP announced an overhaul of its business and has to date sold $17 billion worth of non-core fields and businesses.
As a result net debt at the end of the quarter was $25.9 billion, down from $26.2 billion a year earlier.
BP said it will continue to expand its exploration business having recently announced a tie-up in Russia with state-owned Rosneft. But the move enraged the group's partners in its existing Russian joint venture BP-TNK.
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