David Prosser: BP boss's impossible dilemma: keep the investors happy or the US government?
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Tony Hayward has less than seven weeks to decide who he is most worried about upsetting. On 27 July, BP must tell the stock market what it intends to pay as its second quarterly dividend of the year. Stick with the schedule that saw the oil giant hand out around £7bn worth of dividends last year and the political ramifications in the US don't bear thinking about. But then nor does the reaction of investors in BP, who have already cut its value in half since this crisis began, to a postponement or cancellation of the generous income they have got so used to receiving.
Mr Hayward can expect a pretty unpleasant encounter with the Congressional committee in front of which he is due to appear next week. He has no choice but to remain in the US for that hearing, but is now expected to return to the UK once that grilling is out of the way.
That reflects two calculations on BP's part. First, while Mr Hayward may face accusations that he is cutting and running, the chief executive's reputation in the US is now so damaged that more bad headlines are neither here nor there. It makes sense to hand over the US campaign to Carl-Henric Svanberg, BP's chairman, who has in any case faced criticism for his lack of visibility until now. Second, Mr Hayward may, from a London base, have a better chance of garnering political support for BP from the British Government. That's an important challenge: judging from the Prime Minister's comments yesterday, the Government has for now decided it is more interested in getting off to a good start with President Obama than defending one of its biggest companies.
BP has its political supporters in Britain. But the combined efforts of Boris Johnson and Lord Tebbit, both of whom came out fighting on its behalf yesterday, are unlikely to offer much in the way of protection from the White House. A more robust defence from David Cameron, on the other hand, might calm the President – at least in private, even if the intemperate rhetoric continues.
If Mr Hayward can secure his support, the Prime Minister might like to remind President Obama that it is not only British savers who will suffer if BP suspends dividend payments, or its value falls further. American institutions such as the California Public Employees Retirement System and the Texas Teachers Retirement System hold 25 per cent of the oil company's shares.
Individual investors – ordinary Joes all over the country – own a further 14 per cent of BP. It is not just the immediate economic victims of the oil spill who are suffering in the US, but all of those who are exposed to BP's financial fortunes.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments