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BP posts first quarter profit slump BP raises dividend again in wake of Gulf of Mexico disaster
(about 2 hours later)
BP has posted a 23% fall in profits as the oil giant battled unfavourable comparisons last year after a major asset sell off. Oil giant BP hiked its dividend for the second time in six months as it continues to deal with the wake of the 2010 Gulf of Mexico disaster.
BP beat analysts’ forecasts in the first quarter to record profits of $3.22 billion (£1.92bn) for the first three months of the year, down from $4.22bn for the same period in 2013. Chief executive Bob Dudley once again pledged “increasing distributions to our shareholders”  as a reward for backing the oil giant in the wake of the Deepwater Horizon explosion, which killed  11 workers and battered BP’s stock and reputation.
The first quarter last year included a $12.5bn gain from the oil giant’s sale of its stake in Russian venture TNK-BP. The dividend was increased even though profits in the first three months of 2014 were just $3.53 billion (£2.1 billion) against $16.86 billion in the same period last year.
BP also said it would increase its dividend. However, the figure for 2013 was boosted by BP’s $12.5 billion sale  of its share in Russian joint venture TNK-BP.
BP’s shares fell 1.4% yesterday following the US government’s decision to impose sanctions against the head of Russia’s state-owned energy producer Rosneft. Revenue was also down heavily as a result of the sale, from $107.21 billion to $92.99 billion.
BP holds a major stake in Rosneft, which is among 17 companies linked to Russian President Vladimir Putin in its latest action to punish Moscow for its intervention in Ukraine. BP was one of the darlings of the City until 2010 because of its large and dependable dividend. But this was suspended in the wake of the giant oil spill, and Dudley has been trying to rebuild the trust of the Square Mile by gradually returning the dividend to something close to its former strength.
Today, the payout was increased by 8.3% to 9.75p for January to March, a move bolstered by news that BP was nearing the completion of an  $8 billion share repurchase programme announced last year.
“This is a very solid start to 2014,” said Dudley, who added: “As well as progressive growth in the dividend per share, we expect to use surplus cash to support further distributions through share buybacks or other mechanisms.”
BP yesterday had to reiterate that it was “committed” to Rosneft, the Russian energy group in which it holds a 20% stake as a result of an audacious $27 billion deal in 2012.
The US has placed sanctions on Rosneft president Igor Sechin which could stop Dudley, a US citizen, from dealing with him.