Oil major BP saw its quarterly profit drop amid weaker environment despite higher production during the period.

BP said on Tuesday that its uderlying replacement cost profit for the fourth quarter and full year 2019 was $2.6 billion and $10 billion respectively, compared to $3.5 billion and $12.7 billion for the same periods a year earlier, largely reflecting the impact of the weaker environment.

BP's reported profit for the fourth quarter and full year was $19 million and $4.026 billion respectively, compared with $766 million and $9.383 billion for the same periods in 2018.

Non-operating items in the quarter included a $1.9 billion after-tax impairment charge, mainly for the disposal of US gas assets, and a $0.9 billion charge arising from the reclassification of past foreign exchange losses on the formation of BP's new biofuels joint venture.

The company's full-year organic capital expenditure of $15.2 billion was at the bottom of the guided range. Divestments and other disposals announced since the start of 2019 now total $9.4 billion, keeping BP ahead of schedule to meet its target of $10 billion proceeds by end-2020. BP expects to announce a further $5 billion of agreed disposals by mid-2021.

Upstream production for the fourth quarter, which excludes Rosneft, was 2,698mboe/d, 2.7% higher than a year earlier.

For the full year, production was 2,637mboe/d, 3.8% higher than 2018.

BP on Tuesday announced a quarterly dividend of 10.5 cents per ordinary share ($0.63 per ADS), which is expected to be paid on March 27, 2020.

Bob Dudley, BP chief executive, said: “BP is performing well, with safe and reliable operations, continued strategic progress and strong cash delivery. This all supports our commitment to growing distributions to shareholders over the long term and the dividend rise we announced today. After almost ten years, this is now my last quarter as CEO. In that time, we have achieved a huge amount together and I am proud to be handing over a safer and stronger BP to Bernard and his team.”

Brian Gilvary, BP Chief financial officer, said: “We continue to make strong progress on our divestment program, with announced transactions totalling $9.4 billion since the start of 2019. We are ahead of our target of $10 billion of proceeds by end-2020, and now plan a further $5 billion of agreed disposals by mid-2021. Net debt fell $1 billion in the fourth quarter, and with further disposal proceeds expected, and assuming recent average oil prices, we continue to expect gearing to move towards the middle of the 20 to 30% range through this year.

“Together with the continued strong operational momentum, growing free cash flow, and our confidence in delivery of 2021 free cash flow targets, this underpins our announcement today of an increase in the dividend to 10.5 cents per ordinary share.”