Russian sale helps BP hike its dividend

OIL giant BP yesterday announced a quarterly dividend hike of 12.5 per cent, as it reported a jump in third quarter profit.

The dividend increase to nine cents a share, which will be paid in the fourth quarter, was announced just days after BP confirmed it is to sell its 50 per cent stake in TNK-BP to Russian state-owned producer Rosneft in a deal worth $27bn (£16.8bn).

Profit was up 40 per cent in the three months to September to $5.2bn, from $3.2bn in the previous quarter. But it fell from $5.5bn a year ago.

A strong downstream performance helped lift the numbers.

The oil major has enjoyed a cash boost recently, as it has so far raised $35bn out of its planned $38bn asset sale. It will also net $12bn in cash from the sale of its stake in TNK-BP.

Chief executive Bob Dudley yesterday said that BP’s strong progress in transforming the company “give us the confidence to increase distributions to our shareholders”.

Dudley also touched upon the Gulf of Mexico oil spill, saying that BP was ready for a court battle with US authorities if necessary.

It is currently in talks with the authorities regarding a final settlement for the 2010 oil spill.

Meanwhile, the British oil major reported that production was broadly similar to last quarter, with production excluding TNK-BP at 2.26m barrels of oil equivalent a day.

In a separate announcement, TNK-BP announced a 53 per cent profit surge over the quarter.

Net income rose to $2.7bn (£1.7bn) from £1.8bn last year thanks to lower taxes and costs.