BP chief facing anger of US senators
Published 17/06/2010 | 08:59
BP chief executive Tony Hayward awaited the fury of US senators in Washington today over the Gulf of Mexico spill despite scrapping dividends and setting up a $20bn (€16.3bn) compensation fund.
Mr Hayward - the lightning rod for the anger heaped on BP since the crisis began two months ago - will tell the Committee on Energy and Commerce he is "personally devastated" by the disaster.
The hearing comes a day after BP bosses were hauled before US President Barack Obama at the White House, but shares in the oil giant bounced 6pc today despite its "right and prudent" decision to suspend the company's dividend for the first time since the Second World War.
Markets welcomed the removal of some of the uncertainty over the share payouts although BP - which is also cutting back on capital spending - has stressed that the fund does not represent a cap on its potential liabilities.
Evolution analyst Richard Griffith said: "BP's package should cool the political heat and provide some degree of comfort to equity and bond markets, shareholders, and business and residents in the Gulf."
Since an explosion sunk BP's Deepwater Horizon rig on April 20, killing 11 workers, the company's share price has slumped by almost half.
The dividend cut will hit US investors - which hold around 40pc of the shares - as well as major UK institutional investors such as pension funds.
It was due to pay the first quarter dividend on Monday although this has been cancelled as well as payouts for the second and third quarters of the year.
In a televised speech to Americans earlier this week, Mr Obama hit out at the oil firm's "recklessness" over its role in the region's worst environmental disaster, but toned down his criticism yesterday after BP's concessions.
"BP's liabilities for this spill are significant - they acknowledge that fact," the president said.
But he added that the firm is a "strong and viable company and it is in all our interests that it remains so".
BP chairman Carl-Henric Svanberg also apologised to the American people and acknowledged Mr Obama's frustration - before apologising again for "clumsy" remarks in which he said the oil company cared about the "small people".
Earlier this week, a ratings agency slashed the beleaguered firm's debt to near-junk status. Fitch's second downgrade for BP in less than two weeks leaves the blue-chip stock rated at BBB - raising its cost of borrowing.