BP oil spill costs jump as directors meet over dividend

14th June 2010, Comments 0 comments

BP said on Monday that the cost of sorting out the Gulf of Mexico oil spill had jumped to about 1.6 billion dollars (1.3 billion euros) for the embattled British energy group.

The news came ahead of a meeting of BP directors in London, due at 1200 GMT, to discuss whether to suspend payment of a shareholder dividend amid US pressure to do so in the wake of the oil spill disaster.

However a spokesman told AFP that no formal announcement on the dividend decision was due Monday.

Ahead of the meeting, BP said in a statement that "the cost of the response to date amounts to approximately 1.6 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs."

The figure is up from an estimated 1.43 billion dollars announced by BP on Thursday. BP's market value has meanwhile fallen by an additional tens of billions of dollars with its share price plunging in recent weeks.

BP's share price was down 5.19 percent at 370.95 pence in midday London trade.

Reports have said that BP will bow to massive US pressure and decide to suspend dividend payments as its potential liability over the Gulf of Mexico oil spill soars.

US officials on Sunday demanded that BP set up a special fund to pay for claims.

US President Barack Obama spoke to British Prime Minister David Cameron on Saturday about his criticism of BP and assured him it had "nothing to do with national identity," amid fears it could stoke an anti-British backlash.

BP's share price has plunged by as much as 49 percent since the BP-operated Deepwater Horizon rig sank on April 22.

The accident, following an explosion that killed 11 people two days earlier, sparked an enormous oil spill from a leaking well head on the sea bed.

The disaster has seen huge amounts of oil wash up on the US Gulf coastline, threatening precious wildlife and local communities.

BP said in Monday's statement that "work continues to collect and disperse oil that has reached the surface of the sea, to protect the shoreline of the Gulf of Mexico, and to collect and clean up any oil that has reached shore."

Coast Guard Admiral Thad Allen, in charge of the US response to the Gulf oil spill disaster, said Sunday that he expected BP's embattled chief executive Tony Hayward to attend a White House crisis meeting due Wednesday.

Allen said issues at the top of the agenda would include oil spill containment options and the claims process for victims.

Obama's political opponents have piled criticism on the president for his failure to so far meet, or talk by telephone with Hayward, who has become the public face of the disaster for BP.

© 2010 AFP

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