BP Execs Assure Pensions That Firm Will Meet Obligations, Fail to Guarantee Dividends

(June 7, 2010) — BP’s Chairman Carl-Henric Svanberg and Group Chief Executive Tony Hayward have reassured institutional investors, including pension schemes, that despite spiraling costs following the Gulf of Mexico oil spill disaster, the firm’s obligations will be met. Nevertheless, the firm has delayed a decision to late July on whether to suspend paying its next quarterly dividend as some U.S. lawmakers had demanded.

President Obama criticized the embattled firm on his third trip to the Louisiana Gulf Coast since the oil spill began, telling reporters that BP should not be “nickel and diming” residents along the oil-wrecked Gulf of Mexico coast over damage claims while spending billions in shareholder dividends, Reuters reported. The firm has been reportedly considering whether to pay out about $10 billion in dividends this quarter.

BP’s CEO told shareholders that the company’s response to the Gulf of Mexico oil spill is their top priority, as well as rebuilding trust and confidence in BP and ensuring that such a dire accident never occurs again. The statement follows warnings that dividend payments would suffer as a result of the crisis.

Last year, BP made profits of more than £16 billion and paid dividends totaling almost £7 billion. But, as the firm confronts mounting costs for the Gulf cleanup, their profits and dividends are at risk. Some analysts predict BP’s oil spill costs will likely exceed $30 billion.

“We fully understand the importance of our dividend to our shareholders,” Svanberg said in a statement. “Future decisions on the quarterly dividend will be made by the Board, as they always have been, on the basis of the circumstances at the time. All factors will be considered and the decision taken in the long term interests of the shareholders.”