LEAD: BP on "right path" with 2011 profits and dividend hike

Feb 7, 2012, 13:25 GMT

London - Two years after the Gulf of Mexico oil spill, BP Tuesday said it was on the 'right path' toward recovery after posting profits of 23.9 billion dollars for 2011 and increasing its shareholder dividend by 14 per cent.

The annual replacement cost profits for 2011, which were due largely to high oil prices, compared with a loss of 4.9 billion dollars in 2010, BP figures showed.

Replacement cost profit, which is profit stripping out the effect of oil and other price movements, for the three months to the end of December 2011 was 7.6 billion dollars, compared with 4.6 billion dollars for the same period in 2010.

The first hike in dividend payments since the disaster showed that the company remained on the 'right path' to recovery, chief executive Bob Dudley said.

Eleven workers died in the Deepwater Horizon explosion in the Gulf of Mexico in April 2010, which prompted a major environmental disaster.

BP has so far paid out 8.8 billion dollars in damages claims. The company has committed itself to selling 38 billion dollars worth of assets before the end of 2013, of which it has so far sold 19.7 billion.

Referring to a forthcoming trial between BP and its chief oil contractor, Halliburton, Dudley said: 'We are prepared to settle if we can do so on fair and reasonable terms, but equally, if this is not possible, we are preparing vigorously for trial.'

Analysts said that while BP had clearly benefited from oil prices, the legal liabilities resulting from the spill continued to weigh heavily on the company's shares.

The increase in dividend payments to 5.1 pence a share marked a 'sign of future management confidence,' said Richard Hunter, of Hargreaves Lansdown Stockbrokers in London.

'But the dividend is still far from the historical heady heights, whilst the ongoing fall-out from the Gulf of Mexico spill is a distraction,' he added.

Read more about BP