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BP in fresh bid to stem spill

BP overcame a potentially devastating hitch last night in its efforts to plug the leak currently pumping thousands of barrels of oil into the Gulf of Mexico.

The “diamond saw” used to sever a pipe connected to the damaged blown out preventer had become lodged but BP was successful in removing it.

The news is good for BP as it faced a further day of market woes and continual pressure from the US government, which has now launched a criminal probe into the 20 April explosion of its Deepwater Horizon rig.

Two US senators yesterday urged BP to delay paying out more than $10bn (£6.8bn) in dividends to shareholders until the total cost of the Gulf oil spill has been accounted for.

Senators Charles Schumer of New York and Ron Wyden of Oregon wrote to BP chief executive Tony Hayward yesterday calling it “unfathomable” that the company would pay out the dividend before the total costs were known.

Sources close to the situation, however, have suggested that it would be difficult for the US government to prevent BP from paying out the dividend because the money goes to investors, pension funds and is taxed.

A spokesperson from BP declined to comment on the letter or whether the group would pay out its dividend.

Fears among shareholders climbed on speculation that BP would either cut its dividend payment in half or not pay it out at all as the oil group’s shares closed 25p down at 429.75 yesterday.

The fall in the group’s stocks, which is now believed to have wiped £46bn off of BP’s market value since the April blast, has triggered speculation among analysts over BP’s future and whether its US business, which accounts for 40 per cent of its global operations, will be left vulnerable to a potential takeover.

Some analysts have suggested that rival Royal Dutch Shell would be the best suitor given its size and global operations.

BP would not comment on the speculation. A spokesperson from Royal Dutch Shell also declined to comment.

But Hayward is set to launch a charm offensive later this week as he speaks with shareholders over the current situation.

It is understood he will reassure them that the dividend payment will not be scrapped this year.

Shareholders will quiz Hayward on the company’s safety procedures and its policy of outsourcing oil well drilling.