BP told to put $20bn into an oil spill fund

BP’S SHARES took yet another battering yesterday after the US demanded it set up a separate $20bn (£13.5bn) fund to ensure it has enough cash to cover the Gulf of Mexico clean-up costs.

Shares tumbled by nine per cent in the UK to close at 355.45p, with investors uncertain over whether the oil major will pay its quarterly dividend or use the cash to fund the so-called escrow account demanded by President Barack Obama.

Obama also stepped up his war of words against BP, likening the disaster to the 9/11 tragedy.

“In the same way that our view of our vulnerabilities and our foreign policy was shaped profoundly by 9/11… I think this disaster is going to shape how we think about the environment and energy for many years to come,” he said.

BP would not comment on what was discussed during a board meeting yesterday, but some investors are bracing themselves for a suspension of the dividend. Obama will meet with chief executive Tony Hayward and chairman Carl-Henric Svanberg tomorrow.

Meanwhile, US lawmakers accused the oil major of taking short cuts in its drilling of the Macondo well, which could have jeopardised safety.

In a letter written to Hayward, representatives sitting on the House Energy and Commerce Committee Henry Waxman and Bart Stupak, said BP “repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk”.

The letter went on to say that BP chose a well design that had few barriers put in place to prevent a surge of methane gas from coming up the pipes leading to the rig, which is what is believed to have caused the Deepwater Horizon explosion .

Waxman and Stupak sit on the House committee currently investigating the cause of the explosion.