BP has confirmed it will pay a dividend for the first time since the Deepwater Horizon oil disaster last year.
The oil and gas company today announced it would pay a fourth quarter dividend of $0.07 and grow the dividend “in line with the improving circumstances of the company.”
BP cancelled its dividend payments in June last year, following the explosion at its Deepwater Horizon oil rig, which killed 11 people and led to one of the world’s worst oil spills.
‘We believe now is the right time to resume payment of a dividend to our shareholders,’ comments BP chairman Carl-Henric Svanberg in a statement.
‘We have chosen a prudent level that reflects the company’s strong underlying financial and operating performance but also recognises the need to fully meet our obligations in the Gulf of Mexico and maintain financial flexibility.’
The reinstated dividend was announced alongside BP’s full-year results, which recorded a $4.9 bn loss, including a charge related to the oil spill of $40.9 bn.
BP’s decision is a boost to UK income investors as the energy company makes up a sizable proportion of all British dividend payments.
A report released yesterday by Capita Registrars notes that BP’s dividend cut cost UK investors £5.4 bn ($8.7 bn) in 2010, or around one 10th of all UK dividends paid last year.
The reinstatement of BP’s dividend could be overshadowed later today when partners in TNK-BP, a joint venture between BP and Russian investors, take BP to court over its exploration deal with Rosneft.
The partners argue that, under the terms of their deal with BP, any new exploration projects in Russia should be conducted with them.
Media reports say the partners could try to block a $1.8 bn dividend payment due from TNK-BP.