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Oil major BP has reported a 148 percent increase in profit for the third quarter to USD 10 billion, as the firm reaped the benefits from record oil prices.

The company's profits were achieved during a period when crude prices reached record highs, peaking at $147.27 per barrel on July 11th. Oil prices have since fallen by more than half their July peak, settling at $63.22 per barrel on the New York Mercantile Exchange(NYMEX) at the close of trading yesterday.

Commenting on the results, chief executive Tony Hayward said “Although it has since fallen away sharply, the high oil price of the third quarter obviously helped our absolute result.”

“But this should not obscure very real operational improvements in refining and rigorous cost control across the company that kept our cash costs essentially flat compared with last year – despite immense inflationary pressures in the sector," Hayward said.

Confirming a dividend of 14 cents a share payable in December, Hayward said this represented a dollar rise of some 30 per cent and a Sterling rise of over 60 per cent versus a year ago.

The company's refining and marketing arm also saw its adjusted profit before tax surge from $371 million to $1.97 billion during the last quarter.

"Despite some operational upsets, including hurricane damage in the Gulf of Mexico and interruptions to output from its Caspian fields, BP's oil and gas production was slightly up on the same period of last year and the underlying result for the refining and marketing business rose by 70%," said Hayward.

“We are making good on our promise to deliver the strategy we laid out earlier this year – upstream growth, downstream turnaround and corporate simplification. We are well-placed to weather the prevailing financial storm and to benefit from the business opportunities that may well arise from a downturn.”

“Our aim remains unchanged – to grow that dividend through time in line with our view of future sustainable performance. As new upstream projects like Thunder Horse come on stream, refinery availability is restored in the US, and the results of cost initiatives begin to deliver, the financial benefits of that performance are showing through. We are steadily and methodically meeting our promises.”

Hayward said that although oil prices could dip further as the world enters recession, BP was "well-positioned to cope with such volatility."

“As I said, we think the current turmoil may in fact create opportunities for us and we will look at those very closely,” added Hayward.