BP sees profit drop in Q3 but raises dividend

LONDON (AP) U.K. oil company BP reported a 34 percent drop in third-quarter net profit, but said Wednesday it will increase its quarterly dividend and divest another $10 billion in assets.

BP blamed a drop in refining margins for the decrease in net profit to $3.5 billion in the quarter ended Sept. 30 from $5.28 billion in the same period a year earlier.

But investors were encouraged by the company's plans to increase its quarterly dividend by 5.6 percent, to 9.5 cents a share, payable in December.

Chief Executive Bob Dudley also said the company plans to sell off $10 billion in assets before the end of 2015, with the proceeds set to go to shareholders, such as in the form of share buybacks.

Shares in BP were up 4.5 percent in midday trading in London.

Total production for the third quarter was 3.17 million barrels of oil equivalents a day, driven mainly by growth in production from new projects.

The company said new major upstream projects particularly in Norway and Angola are showing strong production.

BP, which has already set aside more than $42 billion for the 2010 oil spill in the Gulf of Mexico, did not elaborate on its current estimates for the costs of the Gulf spill, but said it might revisit its provisions at a later date.

Ishaq Siddiqi, a market strategist at ETX capital, said the numbers "look clean" on the whole. The fact BP's costs related to the Deep Water Horizon incident have held steady, for now, is "another welcome relief."