1:00PM New York—BP plc net profit up 52.7% on new oil discoveries.

Earnings Review

BP plc, the giant oil company, reported Tuesday fourth quarter replacement cost profit slumped 24% to $2.97 billion from $3.89 billion a year earlier, as refining margins came under pressure and overheads rose.

Net profit, however, rose 52.7% to $4.39 billion compared with $2.88 billion a year ago helped by fresh oil discoveries in Africa and Mexico.

In the quarter, earnings fell 21.8% to $15.69 per share from $20.08 per share, on the replacement cost basis.

Revenue for the fourth quarter rose 29.8% to $81.5 billion from $62.8 billion.

BP said refining and marketing operations posted a loss of $1.3 billion, which dragged profits overall.

The company announced it would cut 5,000 jobs, and help contain rising costs.

Other oil companies Shell and Exxon Mobil have reported firmer profits amid surging global crude oil prices. Oil reached a high of $100 per barrel last month.

But BP said a charge of $1 billion, including tax charges of $603 million chewed into profits, and paid $338 million for the restructuring of its Forward Agenda.

The company said its reserve replacement ratio was more than 100%. This ratio provides critical data for oil companies, showing how much oil has been discovered against that extracted.

""Although our fourth-quarter profits were very disappointing in refining and marketing in particular, we made good, step-by-step progress in bringing new oil and gas fields on stream and rebuilding refining capacity during the period,"" said BP chief executive Tony Hayward.

For 2007, replacement cost profit fell 22% to $17.28 billion or $90.20 per share from $22.25 billion or $111.10 per share in 2006

Dividend and Share Price Review

BP raised its fourth quarter dividend by 31% to $13.525 per share, up from $10.325 per share in the comparable period in 2006.

For the year, dividend rose 16% to $42.3 from $38 4 in 2006.

The company said it would cut overheads by 20% in 2008 and restructure its workforce.

Shares of BP plc rose in London on the brighter dividend prospects. In morning trade Tuesday, the stock rose 2.4% to 555 pence.

Business Review

In 2007, the oil company paid a fine of $50 million for the 2005 Texas City refinery explosion in which 15 people died.

This is just part of $373 million the firm has been asked to pay for various environmental crimes, including fraud by the US Department for Justice.