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BP eyes first dividend rise in four years as oil price surges

BP has signalled it could raise its dividend for the first time in four years after the surging oil price boosted profits and compensation payouts related to its Deepwater Horizon disaster looked set to tail off.
Brian Gilvary, chief financial officer, said the oil giant’s board would consider putting up the quarterly dividend from its current level of 10 US cents per share towards the end of the year as stronger market conditions allow it to pay down its debts.
He said: “We talk about the dividend every quarter and I think we’ll be talking more as we go into the second half of this year.”
BP share price
Mr Gilvary was speaking after BP unveiled an 85pc surge in pre-tax profits to $3.9bn (?2.8bn) in the three months to March. The boost came partly because of higher oil prices, which have surged in recent weeks to highs not seen since a rout in 2014.
Underlying replacement cost profit, a key measure used by analysts to assess BP’s profitability, came in ahead of expectations at $2.6bn.
But net debt crept up 3.4pc to $40bn, sending its gearing, a measure of debts versus the value of its shares, up to 28pc.
BP eyes first dividend rise in four years as oil price surges

BP's Deepwater Horizon disaster flooded the Gulf of Mexico with oil

Credit:
 Charlie Riedel/AP
That was partly thanks to $1.6bn of payments relating to the Deepwater Horizon disaster, the total bill for which is expected to reach around $65bn. The oil rig exploded in 2010, killing 11 and flooding the Gulf of Mexico with millions of barrels of crude.
The bill included a final $1.2bn payment as part of a $20bn settlement with the US Department of Justice, but the giant still has a number of smaller legal bills to pay.
It expects the total payout for this year to reach $3bn, falling to $2bn next year and then around $1bn per year until 2032.  
Mr Gilvary said BP was still awaiting the outcome of around 300 cases against it, out of 390,000 in total.
BP eyes first dividend rise in four years as oil price surges

BP boss Bob Dudley said the oil giant had delivered a "strong set of results" 

Credit:
PA
He added: “I think we have a pretty strong handle now on what the payments schedule looks like.”  
BP’s revenues climbed 22pc to $68.1bn, boosted by a 6pc rise in production to 3.7m barrels per day after new oil and gas fields came online.
Bob Dudley, chief executive, said the company had delivered a “strong set of results”.  
BP's shares were up 1.8pc to 548p in afternoon trade.
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