BP has announced the first rise in its dividend for almost four years as it struck a confident note about its future prospects.
The energy giant increased its dividend by 2.5% to 10.25 cents (7.8p) a share, saying its results had been aided by higher oil prices.
BP’s underlying replacement cost profit for the first half was 5.4 billion US dollars (£4.1 billion), up from 2.2 billion US dollars (£1.7 billion) during the same period in 2017.
Shares were up 3.9p on the news to 569.6p.
Bob Dudley, BP’s group chief executive, said: “We continue to make steady progress against our strategy and plans, delivering another quarter of strong operational and financial performance.
“Given this momentum and the strength of our financial frame, we are increasing our dividend for the first time in almost four years. This reflects not just our commitment to growing distributions to shareholders but our confidence in the future.”
Payouts for the Gulf of Mexico oil spill, which rocked the company in 2010, were 2.4 billion US dollars (£1.8 billion) for the six-month period, down by 1.9 billion US dollars (£1.4 billion) year-on-year.
Net debt at June 30 was 39.3 billion dollars (£29.9 billion), down from 39.8 billion (£30.3 billion) at the same point last year.
With oil prices on the rise, BP’s fuels business reported an underlying replacement cost profit of 2.5 billion US dollars (£1.9 billion), up from 2.1 billion US dollars (£1.6 billion) in 2017.
Fiona Cincotta, senior market analyst at City Index, said BP’s debt pile remained “pretty cumbersome” and that investors were right to be wary about it.
Nicholas Hyett, equity analyst at Hargreaves Lansdown, said: “Like Shell, BP is back to something that might almost be considered normal.
“Cash generation is slightly lower than analysts had hoped for, and is being propped up by asset sales to some degree, but has still proven enough to fund necessary capital investment and increase the dividend.
“With payments relating to the Deepwater Horizon disaster falling and oil prices bouncing, the future looks brighter for BP than it has for some time.”
