BP lifts dividend despite slump in profits

Oil giant beats analysts forecasts in weak price environment

Oil and gas giant BP reported better-than-expected full year results and lifted its dividend despite a weaker price environment that led to a sharp fall in profits.

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The company said 2019 underlying replacement cost profit, its measure of net profit, fell 21% to $10bn (£7.7bn), as the price of oil and gas softened during the period.

Fourth quarter profit fell to $2.6bn from $3.5bn and $12.7bn. Analysts had expected full-year net profit to come in at $9.7bn.

The fourth quarter dividend was lifted by 2.4% to 10.5 cents a share as chief executive Bob Dudley presided over his last full year results after a decade in the role and 40 years with the company. Upstream boss Bernard Looney took over on Tuesday.

Cash flow rose by more to $25.8bn from $22.9bn on a 2.7% rise in production fuelled by BP's $10bn purchase of BHP's US shale assets.

Profits across the sector have been hit by a weak oil market globally with demand further hit by the coronovirus that has swept through Asia. Oil averaged $64.36 a barrel last year, down from $71 in 2018. The price was just under $55 on Tuesday.

BP said it expected full-year 2020 underlying production to be lower than 2019 due to declines in lower margin gas basins. Reported production would also be lower for the same reason and impact of BP's ongoing divestment programme.

First-quarter 2020 reported production was forecast to be lower than the previous three months due to the divestments and planned seasonal maintenance and turnaround activities.

Gulf of Mexico oil spill payments for the year totalled $2.4bn on a post-tax basis, and were expected to be less than $1bn in 2020, BP said.

Sector rival Royal Dutch Shell last week reported a sharp fall in full-year net profit, while Chevron and Exxon Mobil in the US both missed forecasts on Friday.