BP in boost to UK plc with ‘superlative’ performance

A “superlative” performance from BP had the City purring on Tuesday, with pension managers reassured that cash — in the form of dividends — will keep gushing into funds.

A dip in the oil price last year took the shine off shares in the sector, but all the oil majors — Shell, Exxon Mobil and Chevron — have recently produced strong earnings thanks, in part, to the explosion of the US shale industry.

BP said profit in 2018 doubled to $12.7 billion (£9.7 billion) which means its hefty dividend — shares yield more than 6% — looks solid.

BP pays billions into pension funds each year.

Fourth-quarter divi is 10.25 cents a share and shares rose 4% to 541p.

The pace of its buyback scheme has slowed lately because it was pushing through the $10.5 billion takeover of BHP’s shale assets.

Some thought the falling oil price might force BP chief executive Bob Dudley to pull out of this deal, but he held firm. Today he said: “We now have a powerful track record of safe and reliable performance, efficient execution and capital discipline.”

Richard Hunter at interactive investor, said: “These numbers from BP are superlative.”

City analysts have argued that BP needs oil to be at least $60 a barrel for it to be comfortably profitable but BP has been making the case that greater efficiency means it’s fine with $50.

Brent Crude slipped slightly to $62.2, up from $50 in November, but far down from the $86 reached in October.

BP set aside another $3.2 billion to pay for the disastrous 2010 Gulf of Mexico oil spill. That’s well down on the past two years. The catastrophe will, in the end, have cost BP more than $65 billion.

Eleven platform workers were killed when the rig exploded.

BP said it will continue buying back shares and has cash to play with.

Hunter added: “The company is hardly resting on its laurels.”