BP’s new chief executive shifted focus at the oil giant to the “future rather than the legacy of the past” yesterday as it revealed the Gulf of Mexico oil spill sent the company to its first loss in nearly 20 years.
Bob Dudley unveiled strategic moves at the firm, including a return to dividend payments of about 4.3p a share, increased spending on exploration and the proposed sale of two American refineries.
The developments came as BP posted a loss of £3.1billion in the year to December 31, compared with profits of £8.7billion in 2009, after the financial impact of the fatal Deepwater Horizon explosion was deducted.
BP once again upped its estimate of the cost of the disaster to £25.5billion after it took an additional £647.8million hit in the fourth quarter.
Its decision to resume dividend payments is a signal that the firm is recovering and will be welcomed by pension holders and investors given that the stock previously accounted for an estimated one in every six pension pounds.
BP said the payment would grow over time, in line with the improving circumstances of the company.
The disposals in North America – including a plant in Texas City, which was the site of a fatal fire and explosion in 2005 – will halve refining capacity in the US and signal a shift away from the country, where its credibility is tarnished.
Speaking at BP’s head office in London, Mr Dudley said resuming the dividend, halving US refining capacity and investing in exploration were all part of a push to give BP shareholders greater value.
In a sign that BP was trying to move on from the events of 2010, he said: “It’s about choices for the future rather than the legacy of the past,” adding: “We remain deeply sorry for what happened and its effects on the families and communities involved.
“Nothing can restore the loss of those 11 men.”
Mr Dudley said plans to reshape its downstream business – the post-production phase – would involve concentrating on growth in developing and emerging markets. It also plans to sell its refinery at Carson, near Los Angeles, in California.
BP has made a series of upstream asset disposals in the wake of the Gulf of Mexico disaster.
It managed to claw back about £12.6billion by selling interests in Argentina, North America, Egypt, Venezuela, Vietnam and Colombia. It said it was on track to meet its target of up to £18billion.
BP said the divestment programme, plus restrictions in the Gulf of Mexico, would hit its production and it expects to produce some 3.4million barrels of oil and gas a day this year.
In the fourth quarter, BP said it averaged about 3.67million barrels of oil and gas a day, 9% lower than the same period in 2009.
BP lauded its recent £10billion deal with Russian oil giant Rosneft to form an Arctic exploration alliance, however, it is embroiled in a legal tussle with shareholders at TNK-BP, another Russian joint venture, who argue that the new deal breaches its shareholder agreement.
BP’s oligarch partners in TNK-BP won a UK court injunction yesterday blocking the tie-up, however, a Rosneft spokesman said the court move should not derail the deal.
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