BP Plc (BP/), Europe’s second-largest oil company, said profit increased in the fourth quarter on higher crude prices and raised its dividend.
Net income rose to $7.7 billion from $5.6 billion in the fourth quarter of 2010, the London-based company said today in a statement. The dividend was raised 14 percent to 8 cents a share.
Chief Executive Officer Robert Dudley said the third quarter was a turning point for the company and that production and profits should start to increase. Output suffered for more than a year after the Gulf of Mexico oil spill in 2010 forced the company to shut down fields for safety reviews and sell assets to raise cash.
Fourth-quarter earnings, adjusted for one-time items and changes in inventory, were $5 billion, compared with $4.36 billion a year earlier. The average estimate of 15 analysts surveyed by Bloomberg was for profit of $4.9 billion on that basis.
The company is set to start a nonjury trial on Feb. 27 to determine liability and apportion fault for the Macondo disaster. BP shares remain about a third lower than before the spill, and the company has set aside about $40 billion to pay for damages and legal bills.
BP has reached settlements with well partners Anadarko Petroleum Plc and Mitsui & Co., as well as with Cameron International Corp., the maker of the blowout prevention equipment for the well. It has yet to reach agreements with Transocean Ltd., the owner of the Deepwater Horizon rig that exploded and sank, or cement maker Halliburton Co.
Dudley previously increased the asset-sale target to about $38 billion. The company plans to dispose of the Texas City and Carson refineries by the end of this year. He also pledged to increase the company’s cash flow by 50 percent by 2014 by focusing on the most profitable production projects.
Royal Dutch Shell Plc, Europe’s largest energy company, last week reported a drop in net income from a year earlier and also announced plans to increase the dividend. Exxon Mobil Corp., the world’s biggest producer, said Jan. 31 that sales missed analyst expectations as production dropped.
Shell’s profits were hampered by a $278 million loss in its refining operations. BP’s refining market margin, a generic measure of profitability, slipped to $9.10 per barrel in the fourth quarter from $9.98 a year earlier.
Brent crude prices climbed to $109.02 a barrel on average in the fourth quarter, 25 percent higher than a year earlier.
To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net
