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BP Cancels Dividend for First Three Quarters of This Year


Top BP executives, including board chairman Svanberg and Chief Executive Hayward met with U.S. President Obama and several of his top aides Wednesday morning at the White House.

BP Chairman Svanberg announced BP will cancel dividend payments for the first three quarters of the year including the previously announced first quarter dividend due on June 21st.

BP Oil Spill - Devastating Some Industries; Resuscitating Others

Here are several Wall Street Journal articles about industries that are affected by the BP oil spill.

Some of the industries devastated by the BP oil spill are: the U.S. seafood industry; the U.S. tourism industry in the states of Louisiana, Alabama, Florida and Mississippi; the U.S. offshore drilling industry; the restaurant industry in the four states previously mentioned (also restaurants in other states may be affected if the cost of seafood rises); the wildlife and fisheries industries in the four previously mentioned states; the oil and gas industries; the real estate market (especially for waterfront properties in the states along the U.S. Gulf Coast); etc.

However, there's no doubt that the BP oil spill is resuscitating the legal profession on both sides of the pond - generating lots of legal work in the U.S. and the U.K.!

I grew up in New Orleans and have an office in Miami. So I know from first hand experience how these industries are being devastated by this oil spill. Also, who knows what this oil spill will do in the long term to the environment and the health of the people living, working and drinking the water in these affected areas.

I truly hope - for all the parties involved on both sides of the pond - there is a good ending to this very sad story!

BP plans to defer dividend after pressure from President Obama

Times Online

BP is preparing to defer payment of its next dividend to shareholders by placing the money in an escrow account until the full scale of its liabilities from the Gulf of Mexico disaster can be determined.

BP said no decision has yet been taken on the dividend and will not be taken until next quarter's results.

BP on the Defensive as Shares Drop

Wall Street Journal

BP admitted that the cost of the Gulf of Mexico oil spill has risen to $1.43 billion USD. In addition, U.S. politicians pushed for the UK oil company to assume even greater liabilities.

BP has lost ~£58 billion (~$85 billion USD) in market capitalization since the April 20th disaster - when an explosion aboard the Transocean Ltd. drilling rig Deepwater Horizon killed eleven men and triggered the massive oil spill. However BP said today it sees no justification for the collapse in its share price.

But ever-harsher rhetoric from the Obama administration is worrying BP investors. There is immense political pressure in the United States for BP to halt dividend payments. The U.S. Department of Justice said yesterday it is investigating the company's dividend plans.

The Obama Administration has also demanded that BP pay millions of dollars in salaries of oil-industry workers laid off because of a U.S. federal moratorium on deepwater drilling.

So far, not a peep from the UK government. It continues to keep a low profile on the issue, despite increased calls from business to intervene on BP's behalf.