Aker BP raises dividend, eyes higher capital spending

By Nerijus Adomaitis

OSLO (Reuters) - Norway's Aker BP raised its quarterly dividend by 5% on Wednesday and said capital expenditure is set to rise sharply this year, as the oil and gas company aims to boost output in the next five years.

Norway's second-largest listed oil company, partly owned by BP, said it would increase its quarterly dividend to $0.63 per share from $0.60.

Aker BP expects its 2025 oil and gas production to decline to 390,000-420,000 barrels of oil equivalent per day (boepd) from 439,000 boepd last year, before rising to more than 500,000 boepd in 2028 as new offshore fields come on stream.

"We have a clear pathway to sustain production above 500,000 barrels per day beyond 2030, with ambitions for further growth," Aker BP's CEO Karl Johnny Hersvik said in a statement.

After generating a record $6.4 billion cash flow from operations on a full-year basis in 2024, the company was in a strong financial position to develop new fields while paying increased dividends to shareholders, he added.

The company is in the midst of a major push to increase its production organically after expanding briskly via mergers and acquisitions in the decade leading up to 2020.

Ongoing developments include the $10.7 billion North Sea Yggdrasil field currently estimated to hold 700 million barrels of oil equivalent (boe). Aker BP said on Wednesday it would aim to increase the field's resource base to 1 billion boe.

The company plans to allocate $5.5 billion-$6 billion in capital spending in 2025, up from $4.8 billion in 2024, and to spend another $450 million on exploration, it said in the quarterly report.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) fell to $2.72 billion in the fourth quarter from $3.17 billion a year earlier, slightly exceeding the $2.66 billion expected in a poll of 19 analysts compiled by Aker BP.

Analysts at DNB Markets brokerage said they expected a "neutral-to-slightly negative" reaction for Aker BP's share price on Wednesday as the 2025 capital spending appeared to be guided somewhat higher than previously expected.

(Reporting by Nerijus Adomaitis; Editing by Terje Solsvik and Muralikumar Anantharaman)