BP reports 22pc fall in full-year profits

BP became the latest oil and gas major to report falling profits and production as it unveiled a 22pc fall in full-year profits, hit by a drop in refining profits and exits from countries.

Full-year replacement cost profits – a measurement that strips out gains or losses on the value of inventories – dropped to $13.4bn (£8.2bn) from $17.1bn in 2012. Profits for the fourth quarter on the same basis fell 28pc from $3.9bn to $2.8bn.

BP, which is one of the biggest dividend payers in the FTSE 100, raised its fourth quarter dividend 5.6pc to 9.5 cents a share, to be paid in March.

Exits from four countries – Colombia, Venezuela, Vietnam and Pakistan – and other disposals have cost the group around 150,000 barrels a day of production, while the sale of two refineries in Texas and California and an industry-wide fall in refining margins also hit profits.

The oil giant embroiled in litigation over 2010’s Macondo oil spill in the Gulf of Mexico has sold almost $40bn (£24.3bn) of assets since the disaster to help fund the current $42.7bn provision for clean-up costs, fines and compensation payments – a disposal programme that has taken its toll on production.

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