BP has seen its first dividend hike since the Gulf of Mexico spill in 2010 thanks to an increase in profits. Read on to find out more.

By Rachel Wait

 

BP has increased its dividend to shareholders by 14%, making it its first dividend hike since the Gulf of Mexico spill in 2010. The dividend was pushed up to 8 cents per share for the fourth quarter of 2011.

The increase follows BP's announcement that profits soared in the three months to the end of December 2011. Replacement cost profit - the profit when the effect of oil and other price movements is removed - jumped 65% to $7.6 billion, compared to $4.6 billion in the same period of 2010.

For the full year, the firm made a replacement cost profit of $23.9 billion compared with a loss of $4.9 billion in 2010.

BP's chief executive, Bob Dudley, says: "2012 will be a year of increasing investment and milestones as we build on the foundations laid last year.

"As we move through 2013 and 2014, we expect financial momentum will build as we complete payments into the Gulf of Mexico Trust Fund, restore high-value production and bring new projects on stream."

The company is facing a legal trial with contractor Halliburton starting on 27 February. BP wants Halliburton to pay for the costs and damages associated with the oil spill. The oil giant has paid out a total of $8.8 billion in damages claims so far.

Saket Vemprala, oil analyst at Business Monitor International, told the BBC: "The legal liabilities stemming from the 2010 Gulf of Mexico oil spill continue to weigh on the company's shares, and we would not be surprised to see a financial settlement between the company and the US government."