BP has reported a loss of $4.9bn (£3.1bn) for 2010 even after the cost of the Gulf of Mexico spill was taken into account.
The replacement cost loss comes after $40.9bn was set aside to pay for the aftermath of the disaster.
BP had recorded a $13.9bn profit in 2009.
The company's chief executive, Robert Dudley, said BP would restore its dividend payment to shareholders, paying 7 cents a share.
The dividend payouts had been suspended in the wake of the Gulf of Mexico oil spill.
BP's profits during the fourth quarter of 2010 were $4.6bn, a third higher than in the same quarter a year previously.
Some of the increase in profits during the fourth quarter was thanks to the rising oil price, which had climbed to £$90 a barrel by the end of last year.
BP also said in its results statement that it would sell its Texas City oil refinery, where 15 workers were killed in an explosion at the plant in 2005.