BP PLC reported a 53 per cent rise in fourth-quarter net profit Tuesday as oil prices surged, but it posted a fall in earnings for the full year because of refining outages and rising costs.

Shares in the international oil major, which had a turbulent year in which it lost its chief executive and was fined millions of pounds for environmental crimes and fraud, rose as it also announced a more generous dividend and plans to speed up restructuring and cost cutting.

BP 3-month NYSE chart

BP said its quarterly net profit rose to $4.4 billion US, from $2.88 billion US a year ago. Revenue for the fourth quarter, including asset disposals, rose to $81.5 billion US from $62.8 billion US.

Over the full year, net profit fell 5.5 per cent to $20.8 billion US from $22 billion US in 2006. Revenue rose 6.2 per cent to $291.4 billion US.

Chief executive Tony Hayward cheered investors with a 25 per cent dividend hike and progress on plans to create a leaner business by stripping out management.

Hayward confirmed BP's plans to cut 5,000 jobs by the middle of next year, as well as slashing the firm's corporate overheads by up to 20 per cent.

"We are absolutely determined to transform our downstream business as a whole," he said.

"It will not happen overnight, but we believe that the performance gap with our competitors can be progressively narrowed in the next few years."

Royal Dutch Shell PLC, Europe's largest oil company, last week reported a 23 per cent rise in full-year earnings to $31.3 billion US; Exxon Mobil posted the largest ever annual profit by a U.S. company with earnings of $40.6 billion US.

In contrast, BP experienced a tough year in which CEO John Browne resigned last May after lying to a court in a bid to block stories about his private life.

The company also brokered a $50-million US fine with the U.S. Justice Department for the 2005 Texas City refinery explosion in which 15 people died. That plea agreement — part of a $373-million US penalty for environmental crimes and fraud — could be overturned.

On top of the fines and restitution, four former BP employees were indicted by a federal grand jury in Chicago on 20 counts of mail and wire fraud connected to a scheme to manipulate energy markets.