What is being played out now is really quite astonishing.
Just a few days ago, BP’s dividend was a seen by City investors as a line in the sand that could not – and would not be – crossed.
For BP not to pay would be unthinkable.
But the unthinkable is becoming thinkable and increasingly probable.
The BBC Business Editor, Robert Preston said this morning that he was hearing from the top of BP that the dividend payout would be shelved for the time being just to appease Obama and BP’s political opponents in the US.
44 US Senators have signed a letter demanding that BP does not pay its crucial dividend next month.
The Obama Administration is said to be investigating legal action to stop the payment too.
“People are resigning themselves to the fact that there may be a suspension of the dividend,” argues Tony Shepard, Charles Stanley’s oil analyst.
“The best we can hope for is a postponement of what should be a very decent dividend,” adds another analyst David Buik of BGC Partners.
The news adds to the chaos surrounding the company. The company has lost a staggering £58 billion in market capitalization since the April 20 disaster.
This morning BP’s ‘s shares continued to plummet 12 per cent. The news came after the Obama Administration said that the oil company should pay unemployment benefits to thousands of oil workers laid off during a moratorium on deep-sea drilling triggered by the spill.
“BP is responsible for all the damages,” Ken Salazar, US interior secretary, told the Senate’s Energy and Natural Resources committee yesterday. He said that included paying any workers hit by the government’s moratorium on offshore drilling imposed on 33 deep-water rigs while safety reviews took place.
BP is so rattled that it has had to issue a statement, stating that, “the company is not aware of any reason which justifies this share price movement”.
To make matters worse, further congressional hearings are planned today in Washington.
There is also evidence that the latest attempt to contain the slick had actually increased the flow of oil:
Ian McDonald of Florida State University suggesting the well is leaking 26,500-30,000 barrels of oil a day, six times more than figure initially used by BP.
The head of the Government’s spill response, Thad Allen, said that BP collected 15,000 barrels of oil blown well on Tuesday but that significantly more was escaping the containment cap into the ocean.
Finally British politicians are beginning to defend the beleaguered oil company. London mayor Boris Johnson accused President Obama’s government of “anti-British rhetoric“.
Maybe BP should rebrand itself to AP: standing for American Petroleum – how would that one go down in Washington?