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BP Q4 Profit Up 30%; Resumes Dividend - Update

BP Q4 Profit Up 30%; Resumes Dividend - Update
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2/1/2011 3:22 AM ET

Oil giant BP Plc (BP: Quote, BP_UN.TO,BP.L) Tuesday reported a nearly 30 percent rise in fourth-quarter profit as higher commodity prices boosted revenues. Further, the company said it would resume quarterly dividend payment and added that it plans to divest half of its US refining capacity.

Profit attributable to BP shareholders increased to $5.57 billion from the prior year's $4.30 billion. On a per share basis, earnings advanced to 29.28 cents from 22.64 cents. The company included a pre-tax charge of $1.0 billion in the quarter related to the Gulf of Mexico oil spill. Replacement cost profit attributable to the company's shareholders increased to $4.61 billion from $3.45 billion. On a per share basis, replacement cost profit attributable to shareholders increased to 24.55 cents or $1.47 per ADS from 18.38 cents or $1.10 per ADS.

The company's pre-tax profit increased to $8.56 billion from $6.63 billion in the prior year.

Oil producers have been reporting increase in quarterly profits as prices have strengthened in the quarter. Exxon Mobil Corp. (XOM) said Monday that its fourth-quarter earnings growth was driven by higher crude oil and natural gas price realizations amid growing demand.

BP's total revenues and other income increased to $83.99 billion from last year's $73.64 billion. Sales and other operating revenues advanced to $79.70 billion from $70.98 billion generated last year.

In the third quarter, BP reported profit attributable to BP shareholders of $1.78 billion or 9.38 cents per share. Total revenues and other income for the quarter was $74.65 billion.

In the fourth quarter, BP's production averaged 3.67 million barrels of oil equivalent a day, down 9 percent from last year, reflecting higher turnaround activity, particularly in the North Sea and Angola, and the continued impact of the Gulf of Mexico drilling moratorium.

For the full year, profit attributable to the company's shareholders was $16.58 billion or 87.54 cents per share, compared to a loss of $3.72 billion or 19.81 cents per share last year. The latest results included a total pre-tax charge of $40.9 billion related to the Gulf of Mexico oil spill. Total revenues and other income increased to $308.93 billion from the prior year's $246.14 billion.

Replacement cost loss attributable to the company's shareholders in 2010 was $4.91 billion, compared to a profit of $13.96 billion last year. On a per share basis, the loss was 26.17 cents or $1.57 per ADS, compared to profit of 74.49 cents or $4.47 per ADS. Further, the company said it it plans to resume the payment of quarterly dividends, which were suspended in last June following the oil spill in the Gulf of Mexico. BP will pay a dividend of 7 cents a share for the fourth quarter of 2010.

BP said it intends to sell two of its US refineries - Texas City and Carson along with its associated marketing interests. The company plans to divest the assets as going concerns and expects to complete their sale by the end of 2012.

The Texas City refinery became part of BP with the 1998 merger with Amoco. It has 475,000 barrels per day refining capacity and employs some 2,200 BP staff and 2000 - 4000 contractors.

The Carson refinery, south of Los Angeles, has 265,000 barrels per day refining capacity. It became part of BP through the acquisition of ARCO in 2000. It employs some 1200 staff and 500 contractors.

The oil giant is on track to meet its target of up to $30 billion of divestments by the end of 2011, it said. The company has concluded agreements for divestments totaling around $22 billion by the end of 2010.

Looking ahead, BP group chief executive Bob Dudley said, "2011 will be a year of recovery and consolidation as we implement the changes we have identified to reduce operational risk and meet our commitments arising from the spill. But it will also be a year in which we have the opportunity to reset the company, adjusting the shape of our business, and focus on growing value for shareholders."

Production in 2011 is expected to be around 3.4 million barrels of oil and gas equivalent a day. Organic capital expenditure for 2011 is expected to be around $20 billion.

BP closed Monday's regular trade at 484.85 pence, down 1.95 pence or 0.40%, on 31.97 million shares.

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by RTT Staff Writer

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