OIL majors Royal Dutch Shell and BP will kick off the City’s annual results season this week, with the latter due to end its current suspension of dividend payments following the Gulf of Mexico disaster.

BP will take another step in its rehabilitation tomorrow if it delivers on current City expectations and reinstates dividend payments alongside the publication of its full-year results.

The return of BP’s dividend following its suspension due to the Deepwater Horizon disaster would be a key development for pension holders as well as investors, as the stock previously accounted for an estimated one in every six pension pounds invested.

Analysts at Collins Stewart anticipate the quarterly dividend will be about seven cents a share, half the level announced in April.

BP upped its estimate of the bill to cover the cost of the oil spill to $40bn (£25bn) in November.

The company has been able to benefit from a gradual increase in oil prices, which hit $90-a-barrel at the year end.

But production is likely to be ten per cent lower than a year earlier due to the impact of the US drilling moratorium and asset disposals following the disaster, while extended maintenance periods will also impact output.

Later in the week, FTSE 100 rival Royal Dutch Shell will post its full-year results. It has had a more sedate year and analysts have forecast pre-tax profits of about $30bn (£18bn), including a year-on-year rise in fourth quarter earnings of 69 per cent to $4.68bn (£2.9bn).

The company, which reports on Thursday, has benefited from higher oil prices and a hike in production levels.

Full-year results on Thursday from GlaxoSmithKline are expected to be hit hard by multi-billion pound legal charges relating to its controversial diabetes drug Avandia.

Glaxo shocked the market earlier this month when it revealed a record fourth-quarter impact of £2.2bn in costs to settle legal disputes.

This comes after a £1.57bn charge in the second quarter, which was announced in July, as Glaxo has faced lawsuits alleging the drug harms health. Shares in Glaxo have slumped to levels not seen for five months.

Most analysts are now expecting pretax profits to have almost halved to £4.6bn last year, down from £8.7bn in 2009, due to the legal costs.

However, sales are forecast to have held firm at £28.4bn.

Close rival AstraZeneca bettered expectations with its two per cent rise in full-year profits to £8.2bn, but it confirmed challenges for the year ahead.

Both Glaxo and Astra are slashing costs to offset trading pressures.

Glaxo is looking to deliver another £2.2bn of annual savings by next year, having already cut £1bn in 2009.

THE following events will take place this week:

Monday: Interims: Ryanair (Q3); trading update: Greene King; Land Registry house prices.

Tuesday: Finals: ARM Holdings, Autonomy, BP, Ocado; trading updates: National Grid, Northumbrian Water, Pennon; Bank of England lending figures.

Wednesday: Finals: Travelzest; trading updates: Carpetright, Imperial Tobacco.

Thursday: Finals: GlaxoSmithKline, Royal Dutch Shell, Santander, Unilever; interims: BT, TUI Travel (AGM); trading updates: Compass (AGM), Vodafone.