(MENAFN- Kuwait News Agency (KUNA)) Oil giant BP cheered investors Tuesday as it unveiled a higher quarterly dividend, despite profits coming under pressure as its far-reaching disposal plan hit production.
The British supermajor reported underlying replacement cost profit of 5.2 billion US dollars (3.2 billion pounds), compared to 5.5 billion US dollars (3.
4 billion pounds) in the same quarter last year.
The slide in profits came as production of oil and gas, excluding its recently-sold stake in Russian joint venture TNK-BP, dipped 3 percent to 2.26 million barrels of oil a day, analysts noted.
But chief executive Bob Dudley said in a statement the results showed "strong progress" as he announced a 12.5 percent hike in its quarterly dividend to 9 US cents (5.6p) a share.
Shares surged more than 3 percent to 440p today.
On a quarter-by-quarter basis, underlying replacement cost profit was 40 percent higher as it benefited from better refining margins in its downstream business.
BP has sold off large chunks of its business as part of its pledge to raise cash to pay the costs of the 2010 Deepwater Horizon disaster.
While the TNK-BP exit fell outside this pledge, it has recently sold a Texas City refinery, five oil and gas fields in the US Gulf of Mexico and its Bristol-based liquefied petroleum gas (LPG) distribution arm, analysts said. BP's share price has climbed some 57 percent since it slumped to around 280p in the wake of the fatal Deepwater Horizon explosion in April 2010.
The share price is watched closely by a large number of investors as BP accounts for one pound in every six invested by pension schemes.
Looking ahead, BP expects to bring 15 new major upstream projects into production by the end of 2014, 11 of which are in four higher-margin areas - the Gulf of Mexico, Angola, Azerbaijan and the North Sea.
BP has now announced disposals since the start of 2010 for a total of more than 35 billion US dollars (21.8 billion pounds) against its target of 38 billion US dollars (23 billion pounds), excluding the proposed transaction with Rosneft for the sale of BP's share in TNK-BP.
State-backed Rosneft agreed to buy BP's 50% stake in TNK-BP for 17.1 billion US dollars (10.7 billion pounds) in cash and 9.7 billion US dollars (6 billion pounds) worth of Rosneft shares.
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