Pressure on BP increases from US government
BP is coming under increased pressure to shelve plans to pay its shareholders a dividend and take its corporate responsibilities to those affected by the Gulf of Mexico oil spill more seriously.
The company is due to meet with US President Barack Obama later this week, where they will be pressurised into giving concrete promises over its future handling of the ongoing crisis. The oil disaster in the Gulf of Mexico has now cost BP £1.1bn ($1.6bn) and the pressure on the oil giant is likely to intensify over the next few days.
White House officials say they will demand BP set up a special account to compensate victims of the spill and third party administrators should oversee this. Investment bank Goldman Sachs estimates BP may have to pay up to £48bn in damages.
BP’s woes in the Gulf of Mexico seem to be deepening after the US Geological Survey said the oil spill crisis could double the number of estimates previously thought.
BP is under pressure to convince US politicians that it will have enough cash to pay for the clean-up operation and compensation for those affected after the US government said it “not pay a dime” for cleaning up and that BP would be held responsible for all damages.
The US Speaker of the House of Representatives, Nancy Pelosi, has accused BP of a “lack of integrity” over its approach to the spill. An ad campaign for BP apologising for the oil spill polluting the Gulf of Mexico was also slammed by President Obama. The company is responsible for almost one in every seven pounds of dividends paid to British pension pots.
The oil giant has admitted the spillage crisis is costing it millions and says the project will cost about $360m (£244m). According to Louisiana Governor Bobby Jindal, the White House had ordered BP to pay for the construction of sand barriers.
BP estimates that the disaster has so far cost the company approximately $990m (£674m) in clean-up costs, but has refused to speculate on future expenses. This is a massive increase from May when the cost was $350m (£235m).
London 2012 chiefs are continuing to back Games partner BP despite the oil giant being the subject of international condemnation following the Gulf of Mexico oil spill.
Greenpeace recently unveiled a press advertisement accusing BP CEO Tony Hayward of cutting investment in clean energy in favour of dirty sources of oil.
However, BP’s brand reputation crisis following the oil spill in the Gulf of Mexico has left rival petroleum companies relatively unscathed, according to YouGov BrandIndex data published last month.
