BP shares dive again as oil leak bill hits $2bn

Summoned: BP chairman Carl-Henric Svanberg will meet President Obama this week
12 April 2012

BP today said the costs of the Gulf of Mexico oil leak were approaching $2 billion (£1.4 billion) as its shares fell sharply again.

The beleaguered board, under chairman Carl-Henric Svanberg and chief executive Tony Hayward, is holding a meeting by conference call this afternoon to discuss the crisis.

But the meeting is not expected to come to a decision on BP's second-quarter dividend, which is expected to be worth about £1.8 billion.

Its shares, which were down by 2% for most of the morning, suddenly slumped further when American markets opened at 2.30pm following reports that rival oil companies may attack BP in Washington at congressional committee hearings tomorrow when Chevron, Shell, Exxon and ConocoPhillips will testify.

The chief executive of Chevron, John Watson, told the Wall Street Journal that the accident had been "preventable". Chevron added that if BP had used the best practice in the design of the well, the accident would not have happened.

Other oil giants, desperate to persuade the US government to lift a moratorium on deep-sea oil exploration, could use the same anti-BP strategy, some observers have claimed.

"If they say that, it would definitely be damaging for BP," said Société Générale analyst Evgeny Solovyov.

The oil giant is coming under increasing pressure from President Obama's administration to pay this into an escrow account until the clean up has been completed.

Svanberg, Hayward, US head Lamar McKay and BP managing director Bob Dudley have been summoned to meet President Obama at the White House on Wednesday.

The President compared the effects of the oil disaster on the American national psyche to those of 9/11. He told a politics website that "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".

BP shares dropped 30.1p, or 8%, to 361.6p today. The shares bounced 7% on Friday, their strongest rebound since the Deepwater Horizon rig explosion which killed 11 workers on April 20. However, they have still lost more than one third of their value since the blast.

In its latest update to the stock market, BP said the costs of the operation had risen to $1.6 billion with another $300 million pledged to build sand islands off the Louisiana coast in order to protect wildlife.

BP announced that it had continued to capture 15,000 of barrels of oil a day from the leak over the course of the weekend.

It said it had captured 127,000 barrels of oil since the latest container cap was put in place 10 days ago.

Obama will address the US public on television tomorrow after he has made his fourth visit to the areas which have been most affected by the oil spill.

He called on BP to create a ring-fenced fund administered by a third party to meet claims from victims of the spill rather than taking its current "nickel and dime" approach to paying out compensation.

US officials made it clear this was not because they feared BP could not pay but because administering compensation was not a core part of the oil giant's business.

The amount of money to be set aside in this fund will be discussed at the White House meeting on Wednesday, and is likely to run to billions of dollars. The states of Louisiana and Florida have announced that they want $5 billion and $2.5 billion.

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