SHARES in BP jumped more than 4 per cent today as the oil giant cheered investors with a substantial rise in its quarterly dividend, despite profits coming under pressure from a drop in production.
News of the 12.5 per cent uplift in the third-quarter pay-out to 9 cents (5.6p) a share came just days after the group agreed to sell its stake in the TNK-BP joint venture to Russian state-owned company Rosneft in a cash and shares deal worth £16.7 billion.
Chief executive Bob Dudley said: “BP’s performance and the progress we are making in transforming the company give us the confidence to increase distributions to our shareholders.”
The group’s shares closed up 17.85p, or 4.2 per cent, at 442.85p.
Oil and gas production, excluding TNK-BP, was down 3 per cent at 2.26 million barrels a day, but BP said it expects higher production in the fourth quarter as its maintenance season ends.
Profits on an underlying replacement cost basis, the key industry benchmark, came in at $5.2bn, down from $5.5bn for the same period last year, but 40 per cent higher than the second quarter as it benefited from better refining margins.
Investec analyst Stuart Joyner said the results were “much stronger than we and the market anticipated”, driven almost entirely by its refining and marketing operations, where underlying replacement cost profits soared 80 per cent to $3bn, well ahead of the $1.8bn forecast.
However, he said refining margins are expected to decline in the fourth quarter, while work to replace the largest of three crude units at a refinery in the US will also affect output.
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Saturday 25 May 2013
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