LONDON (AP) — Shares in BP PLC plunged again on Monday as the company’s board discussed U.S. demands that it suspend dividend payments until it pays for the cleanup of the Gulf of Mexico oil spill.
BP shares closed 9 percent lower at 355.45 pence ($5.25) on the London Stock Exchange, after recovering some ground on Friday.
The board’s London meeting comes as President Obama begins a two-day visit to the Gulf Coast to view the damage from the massive slick and talk to affected residents.
BP has a number of options regarding dividend payments, and analysts believe the company is unlikely to scrap it altogether. Dividends could be deferred, paid in the form or shares, or paid into a account for payment after BP has paid all its cleanup costs.
Any decision was not expected to be announced immediately, with BP executives due to meet with Mr. Obama in Washington on Wednesday.
“The call from the U.S. administration for a third-party-administered fund to meet the claims of victims of the spill appears to be an attempt to show the U.S. public that the government is ’doing something,’” said Jonathan Jackson, head of equities at London-based Killik & Co.
“As a political compromise, we would expect BP to agree to this request.”
Chris Huhne, Britain’s Energy Secretary, said Monday that BP “remains a strong company” with the financial resources to deal with the damage of the spill, despite the sharp fall in its share prices.
He stressed, however, that whether BP paid its dividends was entirely a matter for the company’s directors.
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