The total dividends announced for 2003 were $5,753 million, against $5,375 million in 2002. Dividends per share for 2003 were 26 cents,
an increase of 8.3% compared with 2002. In sterling terms, the dividend was 0.8% lower as a result of the weakening dollar/sterling exchange rate.
The board sets the dividend based on a balance of factors. It considers present earnings, together with long-term growth prospects and cash flow.
It also considers the group's competitive position. The steady increases in the dollar dividend in recent years reflect the board's assessment of
the group's capacity for a sustained dividend over the longer term.
BP intends to continue the operation of the Dividend Reinvestment Plan (DRIP)
for shareholders who wish to receive their dividend in the form of shares rather than cash. The BP Direct Access Plan for US and Canadian investors
also includes a dividend reinvestment feature.
BP aims to demonstrate financial discipline by balancing cash in and cash
out over time. When trading conditions are favourable, cash flow may be in excess of what is needed for operational requirements, including
funding the capital programme and dividend payments. As part of giving a return to shareholders, one of the steps we take from time to time is
to repurchase our own shares. During 2003, a total of 299 million shares were repurchased and cancelled at a cost of $1,999 million. The repurchased
shares had a nominal value of $74 million and represented 1.3% of ordinary shares in issue at the end of 2002. Since the inception of the share
repurchase programme in 2000, 775 million shares have been repurchased and cancelled at a cost of $6 billion. BP intends to continue making share
repurchases, subject to market conditions and continuing authority at the April 2004 annual general meeting.
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