Dudley could cut dividends at BP by half

Marion Dakers
OIL giant BP is seriously considering halving its dividend once it resumes payments to shareholders, according to people close to the company and news reports over the weekend.

New chief executive Bob Dudley has privately briefed shareholders about his plans to reduce the dividend, and is plotting as much as a 50 per cent cut, according to an interview with one of the weekend newspapers.

The cut would save the company an estimated £3bn a year and would contribute to the firm’s money-saving drive.

BP’s dividend of £6bn a year was the highest in the UK before the Gulf of Mexico disaster caused it to cease payments, as well as prompting a $30bn (£18.5bn) asset sale to help meet clean-up costs.

“It would be no surprise to the big fund managers if the dividend were to be less than what it was before the Gulf spill,” said one person close to the company yesterday.

BP said in its results last week, in which it reported a consensus-beating $1.85bn replacement cost profit, that the company would review its dividend policy at the time of its full year results in February 2011.

Meanwhile, an exploration deal between BP and the Chinese National Offshore Oil Corporation (CNOOC) is close to completion, according to a report by Sky News.

An agreement could be signed during Prime Minister David Cameron’s trip to China this week for exploration in the South China Sea, where the two companies already work together.

However, a person close to BP said yesterday that chief executive Bob Dudley would not be joining Cameron on his first official trip to the country as Prime Minister.

A spokesperson for BP declined to comment.