Oil giant BP hiked its dividend by 5.6 percent Tuesday as its third-quarter profits beat forecasts.
CEO Bob Dudley attributed the strong earnings, which sent the shares 5 percent higher in morning trade, to strong operational progress and a focus on disciplined investment.
"The sector is out of favor. We have to manage our capital very very carefully, we are going to keep our capital next year about the same as this year... I think our shareholders will like that message," Dudley told CNBC.
Its Russian operations are performing very well, he added, and its ligation issues are an ongoing problem but investors should focus on BP's production growth and its ability to find new oil and gas projects, he said.
"We had two significant discoveries this quarter already, I think they should look at us as a fundamentally sound oil and gas company," he said.
Underlying replacement cost profit, a common accounting practice to report profits in the oil industry which takes into account the fluctuations in the price of oil, came in at $3.7 billion for the third quarter. That compared with $3.17 billion forecast in a Reuters poll. In the second quarter, BP missed expectations
Operating cash flow in the quarter was $6.3 billion, with Dudley adding that the group's target for cash flow in 2014 was still on track.
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He added that the company intends to continue its program of focusing its business portfolio worldwide around BP's key assets and strategic strengths and expects to divest a further $10 billion in assets before the end of 2015.
The company would continue to review share buybacks and dividend hikes, Dudley said.
"I think our shareholders have been very very patient with BP," he said, adding that he is "optimistic" on future share price.