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BP optimism buoys dividend and shares

Reuters London

British oil group BP raised its dividend yesterday, confident it could bounce back from the Deepwater Horizon US oil spill with a rejigged business in Russia and a focus on exploration and oil production.

BP has fallen to fourth in the top tier of oil and gas companies. It has shed chunks of its business to pay compensation for the 2010 explosion and spill that killed 11 people and triggered an environmental catastrophe.

Yesterday the chief executive, Bob Dudley, said BP was ready for a court battle with US authorities over the spill, and was positive about the new Russian strategy announced last week in which it would sell its half of TNK-BP for $12.4 billion (R108bn) in cash plus a 19.75 percent stake in state-controlled Russian group Rosneft. He lifted BP’s dividend by 12.5 percent to 9c a share.

BP said third-quarter underlying replacement cost profit fell to $5.2bn from $5.5bn a year ago. The share price was up 5.3 percent in morning trade, outperforming Europe’s Stoxx oil and gas index.

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