BP’s Bob Dudley tips return of dividend

Dudley, who has officially taken over as chief executive from the embattled Tony Hayward, has hinted that the oil giant could resume dividend payments within months.

BP’s shares closed 2 per cent higher yesterday and rose a further 2 per cent in morning trading today, despite the company announcing that the clean-up bill for the Gulf of Mexico oil spill has now climbed to £7.1bn.

BP suspended its dividend payouts in June for the first time in 18 years, bending to pressure from the US government to set aside $20bn for the victims of the oil spill.

Dudley recently told analysts that he still expects total costs to reach $32bn. The group has raised $10bn through asset sales so far – a third of the $30bn worth of assets it plans to sell off to help pay for the bill.

Yet, Mr Dudley suggested that dividends could restart early next year, with the board to discuss the prospect of paying a dividend in the first quarter.

Bob Dudley: BP's all-American hero?
BP's new chief executive may speak American-English - but after being chased out of Russia by billionaire oligarchs in 2008, shareholders might ask how his Russian is of late.

The former head of BP's Russian joint venture TNK-BP, which accounts for 25 per cent of BP's business, Mississippi-born Robert "Bob" Dudley quit Russia steeped in controversy. Dudley himself dubbed the debacle "an example of the extreme end of the fun" in an internal BP magazine. 

Dudley is a "first class employee", whose promotion to CEO is "an inspired appointment", David Buik, partner at BGC Partners, told Channel 4 News. But there's a catch - his Russian past. 
Read more: BP's all-American hero?

Political pressure has eased since the group’s move to ring-fence the vast victim compensation fund.

The oil giant has also appeased long-suffering shareholders earlier this week with decisive action to rebuild trust following the spill.

Earlier this week Mr Dudley unveiled a management shake-up ousting exploration chief Andy Inglis and creating a new safety division.

Dudley also promised a review of BP’s bonus structure and how it manages third-party contractors, which bore much of the blame for the spill in BP’s internal report.

The explosion of the Deepwater Horizon rig on 20 April killed 11 workers and caused an estimated 4.9 million barrels of oil to gush into the Gulf – the largest offshore spill in US history.

Oil stopped spewing into the ocean in mid-July, with the well finally sealed permanently on 19 September, when BP said the bill stood at $9.5 bn.

'The entire future of deepwater oil exploration cast into a different light'
For so long, so powerful - the essence of Big Oil - BP was a true global economic titan with numbers that would shame the GDPs of many nation states across the planet. Its preeminent, unassailable position made it a sure bet for shareholders year in year out, and a mainstay of Britain's pension funds by virtue of that stability.

Much of that, now either gone or seriously damaged. Swept away by the Deepwater blow-out. Shareholder confidence, deeply eroded. Corporate image tarnished for the foreseeable future. Personal careers wrecked. 

The entire future of deepwater oil exploration cast into a different light. And US lawyers in the compensation industry kept busy for many years to come.

More analysis from Chief Correspondent Alex Thomson and detailed analysis of the Deepwater Horizon disaster and its aftermath.

Special report: read more on the BP oil spill