BP may cut dividend as spill lingers

BP DIRECTORS will today meet to discuss whether the oil giant should bow to pressure from the US government and cut its dividend payment at the same time as establishing a separate disaster relief fund.

The meeting, which will take place in London, will come ahead of discussions in Washington between chief executive Tony Hayward, chairman Carl Henric Svanberg, clean-up head Bob Dudley and US chairman Robert Malone, and US President Barack Obama later this week.

Directors are expected to discuss whether the company will move to cut its second quarter dividend payout and establish an escrow account to pay for the spill and compensate effected individuals and businesses.

A spokeswoman from BP last night confirmed that the board will discuss both measures but said it is unlikely a decision will be made today. She said that the escrow fund, which would be managed by a third party, is one of the options being considered by the board.

Obama is expected to demand that BP set up the account with “substantial reserves” later this week when he makes a televised address to the US public. BP said it had not spoken to Obama about the fund.

Over the weekend BP was given a 48-hour ultimatum by the US Coast Guard to come up with a better plan to stop the oil leak entirely.