BP's former CFO has died. Picture: Reuters.

London - British oil firm BP raised its quarterly dividend and said further share buy-backs were on the cards as it posted quarterly profit slightly above forecasts despite difficulties in Russia.

The company on Tuesday posted underlying replacement cost profit of $3.2 billion in the first quarter, down from $4.2 billion in the same period a year ago, but slightly ahead of a consensus forecast of $3.1 billion.

The lower profit was the result of a weaker refining environment and lower production as the company has shed assets, and after a write-off of $521 million from a decision not to proceed with a project in the shale in Utica in the US.

Compared to the previous quarter, BP's profits were hit by a falling contribution from its stake in Russia's Rosneft.

BP has said repeatedly that it will stand by its investments in Russia since Moscow's intervention in Ukraine.

BP is the largest foreign investor in Russia through its nearly 20 percent stake in the Kremlin's state oil champion and Russian production was responsible for about a third of BP's output in the first quarter.

BP said on Monday it was considering what US sanctions against the head of the Russian energy company, Igor Sechin, would mean for its business.

The share of profits BP generated from Rosneft, which last quarter accounted for about a quarter of its total, shrunk significantly due to the weakening rouble as Russia's economy comes under pressure from the tense standoff with the West over Ukraine.

Chief executive Bob Dudley said the company was delivering on its targets and that the focus was on returning cash.

“As well as progressive growth in the dividend per share, we expect to use surplus cash to support further distributions through share buy-backs or other mechanisms,” he said in a statement.

BP said it would raise its quarterly dividend to 9.75 cents per share, to be paid in June, 8.3 percent higher than a year earlier, and above the 9.5 cents it has been paying since October.

The company, which remains involved in litigation related to the 2010 oil spill in the Gulf of Mexico, said provisions to cover the spill's clean-up, fines, compensation and legal costs had not risen in the quarter and remained at $42.7 billion. - Reuters