BP reported an improved quarterly profit on Tuesday, and said a return of operational momentum has allowed it to boost its dividend.
The energy giant posted fourth-quarter replacement cost profit of $7.61 billion, up from $4.61 billion during the same period last year.
Replacement cost profit, an accounting method common in the oil industry, determines a company's cost of goods sold based on the current price of oil, rather than the price at the time reserves were acquired. That costs of goods sold is deducted from revenue to determine profit.
The oil company increased its dividend by 14 percent, to 8 cents per share.
Stripping out one-offs, the company's profit was was $4.99 billion, in line with an I/B/E/S consensus forecast of $4.89 billion, although one analyst said the result was benefited from a lower than expected tax rate.
After the earnings announcement, the company's NYSE-traded shares edged higher in premarket trading. (Click here to get real-time quotes for BP.) Shares of the UK-based company rose in London .
BP's total capital expenditure was $7.6 billion for the fourth quarter and $31.5 billion for the full year. For 2012, company sees capital expenditure to come in at around $22 billion.
The company expects refining margins in the first quarter to be stronger than in the fourth quarter, and said it sees the marketing environment in fuels, lubricants and petrochemicals to remain subdued given the outlook for global demand.
BP said its 2011 reported reserves replacement ration, excluding acquisitions and disposals, was 103 percent.
Mexico Spill Update
BP said it was preparing "vigorously" for lawsuits related to its Gulf of Mexico oil spill, which are due to start later this month.
Chief Executive Bob Dudley said BP was ready to settle on "fair and reasonable terms," but added he was also ready to fight.
Europe's second-largest oil group by market capitalization added it would end payments into the $20 billion fund created to compensate those impacted by the United States' worst-ever offshore oil spill a year early after receiving contributions from its partners in the doomed Macondo well.