New BP CEO says hopes to restore dividend in 2011

BP Managing Director Bob Dudley poses for the media outside BP's headquarters in London July 27, 2010. REUTERS/Toby Melville

LONDON (Reuters) - Oil major BP Plc's BP.L incoming Chief Executive Bob Dudley said he wanted to restore dividend payments next year, in line with previous guidance, as the company looks to put the Gulf of Mexico disaster behind it.

“The board will get together and talk before the end of the year about restoring a dividend in some form in the first quarter,” Dudley told BBC television on Thursday.

BP shares in London gained as much as 3.6 percent to 436.2 pence after his comments, reaching their highest level since August 9. They later pared gains to trade up 2.9 percent at 433 pence by 1458 GMT.

“Its obviously for the board to decide ... from what I see happening in the performances of the businesses, I believe we will get there,” Dudley said.

The company in June said it was cancelling its previously declared first-quarter dividend and would not pay interim dividends for the following two quarters, adding it would reconsider resumption of payments at the time of its fourth-quarter results.

“At that time they did say they would review it at the year-end figures. There hasn’t really been a change in that stance really,” said analyst Tony Shepard at brokerage Charles Stanley, adding BP’s annual figures are usually published in February or early March.

“That’s when I’m anticipating some news on the dividend, and the hope is that they will reinstate a ... payment. It might not be as much as it was in the past, because obviously they’re still looking to improve the balance sheet ratios.”

The decision to suspend the dividend came as the company created a $20 billion fund for damage claims and as oil gushed into the Gulf of Mexico following an explosion on Apr. 20.

Editing by Keith Weir and David Holmes