Multinational BP has reported a 23% drop in profits to $3.22 billion (£1.92 billion) for the first quarter of 2014.

The underlying replacement cost profit figure, which strips out the effect of oil price movements, compared to profits of $4.22 billion recorded in the same period in 2013, but was still ahead of analyst forecasts, reports BBC News.

BP said it would increase its dividend by 8% to 9.75 cents a share – the second increase in six months.

BP said its first quarter results had been affected by lower production and write-offs in its exploration activity, including $521 million from a decision not to proceed with a shale project in Utica, US.

The company said it expects production to edge even lower in the second quarter.

Compensation and legal costs relating to the 2010 oil spill in the Gulf of Mexico had not risen in the quarter and remained at $42.7 billion, BP added.

BP’s profits, compared to the previous quarter, were also hit by a falling contribution from its 20% stake in Russia’s Rosneft.