British oil giant BP has reported a 14 percent rise in its fourth quarter profits and raised its dividend contrary to market forecasts.

Adjusted net profit for the period which ended on Dec. 31 2011 went up on strong crude prices. Net profit rose to $7.69 billion, against $5.57 billion for the fourth quarter of 2010. Total earnings for the quarter stood at $96.34 billion from $83.99 billion in the same period in 2010.

The company unveiled the decision to raise its dividend 14 percent to eight cents a share for the quarter. The dividend rise marks the firm's first since the massive Gulf of Mexico oil spill.

Chief executive Bob Dudley said: 2012 will be a year of increasing investment and milestones as we build on the foundations laid last year. As we move through 2013 and 2014, we expect financial momentum will build as we complete payments into the Gulf of Mexico Trust Fund, restore high-value production and bring new projects on stream.

BP's clean replacement cost profit, adjusting for one-time items and changes in inventory, for the fourth quarter stood at $4.99 billion, against $4.36 billion for the fourth quarter of 2010. This figure has beaten the market forecast of $4.88 billion.

The company's overall performance in the quarter was lifted by solid levels of oil and gas prices as well as improved production volumes. Following October's turning point, BP's oil and gas production rose by over five per cent or 170,000 barrels of oil equivalent a day (boed) from the third to the fourth quarter of 2011. For the year, production averaged 3.45 million boed, ahead of the expectation of 3.40 million boed that the company had set for the year, the company said.

BP has committed $1 billion for the early restoration of natural resources following the Deepwater Horizon accident in 2010 and the subsequent massive oil spill.

Dudley added: BP is on the right path, working to grow value through the 10-point plan we laid out in October. Above all, we have a relentless focus on safety and risk management. And we are playing to our strengths - investing in exploration, deep water, gas value chains, giant fields and a world-class downstream, while actively managing our portfolio to grow value.