BP offers Barack Obama clean-up billions

The Sunday Times [UK]
13 June 2010

BP is considering putting several billion dollars into a ring-fenced clean-up fund to appease American concerns over the soaring cost of the Gulf of Mexico oil spill.

The fund is one of several options to be put to the company’s board tomorrow ahead of a meeting on Wednesday between Barack Obama and Carl-Henric Svanberg, BP’s chairman. Yesterday Obama told David Cameron, the prime minister, he had “no interest in undermining” the company’s value.

BP’s directors are discussing a reduction in dividend payments as part of a peace offering to Obama, who has made stinging attacks on the group and its management. Company sources said directors were not likely to axe the payout completely and were trying to find a middle way. “They know it can’t be business as usual.”

One adviser said the fund would help tackle the “Valdez factor”, a reference to the 1989 Exxon Valdez oil tanker disaster, claims for which are still tied up in court. “We need to show we are willing to pay upfront and won’t wait for litigation.”

Svanberg will be given a more prominent role. He has been criticised for remaining largely out of sight during the crisis.

BP has, meanwhile, drafted in a phalanx of extra advisers to counsel it on its options. The team includes John Studzinski at Blackstone, the American investment firm, and Goldman Sachs, the Wall Street giant and long-standing BP adviser…

The article continues at The Sunday Times.

Comments are closed.