BP (BP) has benefited from high oil prices and, as expected, the energy giant has reinstated its dividend. BP said in a statement that it would sell two American refineries, Texas City and Carson, and "plans to resume the payment of quarterly dividends, which were suspended in June 2010 following the oil spill in the Gulf of Mexico."
The U.K.-based company posted a fairly impressive fourth-quarter profit, but a full-year loss. "BP's fourth-quarter replacement cost profit was $4,614 million, compared with $3,447 million a year ago. For the full year, replacement cost loss was $4,914 million compared with a profit of $13,955 million a year ago. Including the impact of the Gulf of Mexico oil spill, net cash used in operating activities for the fourth quarter was $0.2 billion and net cash provided by operating activities for the full year was $13.6 billion, compared with net cash provided in the same periods of last year of $7.3 billion and $27.7 billion respectively. The amounts for 2010 included a net cash outflow of $5.4 billion and $16.0 billion for the fourth quarter and full year respectively relating to the Gulf of Mexico oil spill," the company said in its earnings statement.
The company also re-committed to improving safety procedures since the disastrous oil spill.
BP still faces the problem of whether its $20 billion fund for the clean-up of the Gulf spill will be adequate. Perhaps more important, it is not yet clear what fines and sanctions the firm will face from the U.S.
BP will also have to prove to investors that the restructuring its has gone through since the spill will create a more nimble and profitable company. The oil firm has sold off a number of assets to cover the costs of the Deepwater Horizon explosion. It has now decided to exit most of its refining operations in the U.S. And, it has gone to the capital markets to raise debt. It may take until 2011 or even 2012 financial results are released before the investment world knows whether most of BP's decisions were the correct ones.