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.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here