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LONDON (Alliance News) - BP PLC Tuesday announced an increased quarterly dividend despite pretax profit falling significantly in its first quarter, as lower revenues and a fall in other income hit the oil and gas major.
BP said pretax profit fell 73% to USD5.27 billion for the three months ended March 31 from USD19.73 billion the previous year, as revenues fell 2.6% to USD91.71 billion from USD94.11 billion.
BP also said it saw lower gains from the sale of business and fixed assets after receiving USD12.54 billion in gains during the first quarter of 2013 due to the disposal of the company's interest in TNK-BP.
The company also noted that its production fell 8.5% to 2.13 billion barrels of oil equivalent per day in the recent quarter and noted that its reported production, excluding from Russia, is expected to be lower in the second quarter due to planned seasonal turnaround activity.
Despite this, the company increased its quarterly dividend by 8.3% to 9.75 cents per share and said it remains confident on achieving its planned targets in 2014.
BP also noted that its underlying replacement cost profit, which is adjusted to include non-operating items and fair value accounting effects, increased during the period compared with its previous quarter, to USD3.23 billion from USD2.81 billion, and that this figure was better than market expectations for the quarter of USD3.1 billion.
Chief Executive Bob Dudley called the company's performance a "very solid start" to the year and highlighted strong operating cash flow, exploration success, upstream project start-ups, and the ramp-up of its upgraded Whiting refinery.
The news comes after the company announced in February, that its pretax profit fell in its fourth quarter but increased significantly in the full year 2013.
BP said total revenues were up 2.1% in 2013 to USD396.22 billion from USD388.07 billion due to strong growth in underlying oil and gas production, particularly from key regions such as the North Sea, Angola and Gulf of Mexico.
In October 2013, the company announced plans to divest a further USD10 billion in assets before the end of 2015 and has so far agreed to roughly USD3.0 billion of such divestments.
BP announced in April that it intends to halt refinery operations at its major Bulwer Island refinery in Brisbane, Australia by mid-2015, as the Australian operations of major commodities players continue to struggle. It also announced in April, plans to sell interests in four BP-operated oilfields on the North Slope of Alaska to Hilcorp, a privately-held independent oil and natural gas exploration and production company.
In addition, the company could be hit by ongoing sanctions against Russia as part of the Ukraine crisis as amongst those hit by the extended sanctions announced Monday is Igor Sechin, chief executive of Rosneft OAO.
BP has a 19.75% holding in Rosneft, the world's largest extractor of natural gas, and it is unclear what the sanctions will mean for BP's operations in Russia and the US.
However, a spokesman for BP said on Monday that the company is, "committed to our investment in Rosneft, and we intend to remain a successful, long term investor in Russia. We are considering today?s announcement to see specifically what this may mean for BP. We will of course comply with all relevant sanctions."
BP shares were up 0.8% to 492.55 pence in early trading Tuesday.
By Tom McIvor; tommcivor@alliancenews.com; @TomMcIvor1
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