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BP ups asset sales, dividend as big oil Q3 kicks off

A British Petroleum (BP) logo is seen at a petrol station near the Burj Khalifa in Dubai August 29, 2012. REUTERS/Jumana ElHeloueh

By Andrew Callus

LONDON (Reuters) - BP Plc kicked off the quarterly results season for top global oil firms with some good news for the sector's beleaguered investors - a forecast beating result, a dividend hike, and a promise to sell more assets and return the proceeds to shareholders.

The world No. 5 by value among investor-controlled oil and gas groups also reassured investors that capital spending next year would stay steady at $24-$25 billion - a slight tightening from previous guidance of $24-$27 billion for the years up to 2020.

Shareholders throughout the sector have been worried that rising costs will allow spending to balloon, crimping cash flow should oil prices drop and reducing the industry's ability to offer them returns.

BP's underlying replacement cost net profit for the quarter was $3.692 billion compared with a company-supplied consensus forecast of $3.170 billion.

The figure was sharply lower than a year ago's $5.017 billion - mainly because of weaker refining margins, divestment of refineries and reduced income from its Russian business, but it was more than the second quarter's $2.712 billion when a big Russian tax charge hit the bottom line.

The company also raised its quarterly dividend by 5.6 percent to 9.5 cents a share and said it would sell $10 billion of assets over the next two years, returning most of the proceeds to shareholders - a higher rate of disposal than previously promised.

BP has already sold $38 billion of assets to pay for the Gulf of Mexico oil spill of 2010 - but asset sales have become a theme throughout the sector as it struggles with rising costs and eyes potentially lower oil prices in future.

The company recently won a small victory in its sea of legal defeats over the oil spill and in the results it derecognized about $400 million of provisions within the $20 billion fund it has set aside for certain types of compensation.

However, it raised slightly its overall cumulative charge for the spill to $42.5 billion from $42.4 billion.

(Reporting by Andrew Callus; Editing by Sarah Young)