BP cuts jobs as profits fall

LONDON, England (AP) -- BP reported a 53 percent rise in fourth-quarter net profit Tuesday as oil prices surged, but full-year profits fell due to refining outages and rising costs.

Shares in the oil giant, which lost its chief executive and was fined millions for environmental crimes and fraud, rose as it also announced a more generous dividend policy and plans to speed up restructuring and cost cutting.

BP said that net profit rose to $4.4 billion, from $2.88 billion a year ago.

Revenue for the fourth quarter, including asset disposals, rose to $81.5 billion from $62.8 billion.

Over the full year, net profit fell 5.5 percent to $20.8 billion, from $22 billion in 2006. Revenue rose 6.2 percent to $291.4 billion, from $274.3 billion.

Output at BP was boosted for the first time in three years because of new projects from Angola to the Gulf of Mexico.

The company's closely watched quarterly replacement cost profit -- which excludes changes in the value of crude inventories, measuring the amount it would cost to replace assets at current prices -- fell 22 percent over the year to $17.3 billion.

The quarterly replacement cost figure is viewed by many analysts as the best measure of an oil company's underlying performance.

However, Chief Executive Tony Hayward cheered investors with a 25 percent dividend hike and progress on plans to create a leaner business by stripping out management.

Hayward confirmed BP's plans to cut 5,000 jobs by the middle of next year, as well as slashing corporate overhead by up to 20 percent.

"We are absolutely determined to transform our downstream business as a whole. It will not happen overnight, but we believe that the performance gap with our competitors can be progressively narrowed in the next few years," he said.

Royal Dutch Shell PLC, Europe's largest oil company, last week reported a 23 percent rise in full-year earnings to a record $31.3 billion while Exxon Mobil posted the largest ever annual profit by a U.S. company with earnings of $40.6 billion.

BP had a more turbulent year.

BP Chief Executive John Browne resigned last May after lying to a court in a bid to block stories about his private life.

The company also brokered a $50 million fine with the U.S. Department of Justice for a 2005 Texas City refinery explosion in which 15 people died. That agreement could be overturned, however, with a federal judge on Monday giving victims and their families unhappy with the amount of the fine another chance to argue why the company's plea deal should be rejected.

The deal was part of a larger $373 million fine by the Justice Department for committing environmental crimes and fraud.

On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets.

BP shares rose 2.4 percent to 555 pence ($10.93) in midmorning trade on the London Stock Exchange. E-mail to a friend

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