'Strong' BP has resources for US pay-outs: British minister

17th June 2010, Comments 0 comments

Oil giant BP is a "very strong company" and has the resources to cover the costs of the Gulf of Mexico oil spill, British Finance Minister George Osborne said on Thursday.

"BP in the end is a very strong company," Osborne told BBC radio, when asked about the 20-billion-dollar (16.3-billion-euro) fund BP had unveiled on Wednesday to face the mounting costs from the disaster.

He added: "BP have set aside some money, a very considerable sum of money, and they have those resources.

"But let's not forget this is a very important company not just to the British economy but to the American economy as well and we want it to succeed and flourish in the future for all our sakes."

BP chairman Carl-Henric Svanberg announced the fund on Wednesday after talks with US President Barack Obama and said no more shareholder dividends would be paid this year as it tries to meet the bill from the spill.

The group's share price soared on Thursday by more than seven percent, before pulling back slightly to stand at 355.3 pence, up 5.40 percent from the closing level on Wednesday.

The announcement of the huge war chest represented a major victory for Obama, who has been under fire over his handling of the disaster.

But he also sought to reassure investors about BP's financial health, saying it was a "strong and viable company" and he was "absolutely confident" it would be able to meet its obligations.

BP chief financial officer Byron Grote said the company planned to offload 10 billion dollars of assets to help pay the bill, but analysts said it should be strong enough to weather the storm.

© 2010 AFP

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