BP dividend up as profits bounce back

BP yesterday tried to draw a line under the Gulf spill crisis as it hiked its dividend and reported a surge in profits.

The company said it was “vigorously” preparing for a flurry of law suits in connection with oil spill claims to start later this month.

Analysts were divided over whether BP would settle beforehand, as chief executive Bob Dudley made it clear that the company would fight if the terms on the table were not “fair and reasonable”.

The oil major said replacement cost profits – the standard measurement for the industry – for the three months to the end of December 2011 was $7.6bn (£4.8bn).

That compares with $4.6bn for the same period in 2010.

For the whole year, BP’s profits were $23.9bn compared with a $4.9bn loss in 2010.

BP raised its quarterly dividend by 14 per cent to eight cents a share – its first hike since the Gulf of Mexico spill.

Dudley added: “BP is on the right path, working to grow value. We expect financial momentum will build as we complete payments into the Gulf of Mexico Trust Fund.”

BP has so far paid out $8.8bn in damages claims for the Deepwater Horizon rig blast nearly two years ago, which killed 11 workers.

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