BP back in profit and increases dividend by 14%

Tuesday, 07 February 2012 09:18

BP has announced a big increase in profits in the final quarter of 2011 and consequently a rise in dividends payable to shareholders.

BP had to pay out billions of pounds in costs and damages as a result of the oil spill in the Gulf of Mexico in 2010. The environmental disaster killed 11 oil rig workers and caused the worst offshore oil spill in US history.

BP has so far had to pay out $8.8 billion in damages. The disaster led to BP making a loss of $4.9 billion in 2010.

However, BP announced that for the final three months of 2011 its replacement cost profit – the profit after taking out the effect of oil and other price movements – was $7.6 billion. This means its total profit for 2011 was $23.9 billion.

This means that BP can has been able to announce an increase in the dividend it can pay to shareholders for the first time since the Gulf of Mexico oil spill. BP’s dividend has increased by 14 per cent or 8 cents per share for the 4th quarter.

BP benefitted from the consistently high price of oil in the final quarter, where the price has remained at close to $100 a barrel.

BP is facing a vital court battle in the coming weeks over who will have to pay for all costs and damages as a result of the oil spill. It goes to court against its contractor, Halliburton, to settle the dispute shortly.

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