Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Senators push BP to suspend dividend

By Ben Rooney, staff reporter


NEW YORK (CNNMoney.com) -- BP should suspend dividend payments to shareholders until the full costs for cleaning up the oil spill in the Gulf of Mexico can be calculated, two U.S. senators said Wednesday.

In a letter to Tony Hayward, the British oil company's chief executive, Senators Charles Schumer, D-NY, and Ron Wyden, D-Ore., said paying a dividend before the ultimate cost of the disaster has been tallied would be "unfathomable."

BP paid a dividend of 56 cents per share last year, for a total 2009 payment of $10.5 billion, according to the company's annual report.

According to several published reports, Hayward is scheduled to talk to investors later this week and reassure them that BP will continue to pay its dividend. BP is currently scheduled to make it first-quarter dividend payment to shareholders on June 21.

Schumer and Wyden said they understand the need to reassure investors that the spill will not hurt BP's long term financial health. But they questioned the company's ability to pay the dividend and cover all of the costs associated with the disaster.

"We are concerned that such action to move money off of the company's books and into investors pockets will make it much more difficult to repay the U.S. government and American communities that are working around the clock to stem the damage caused by this devastating oil spill," the senators said.

It remains unclear how much the spill will eventually cost BP. Estimates have ranged from $3 billion to $30 billion. BP said last week it has already spent nearly $1 billion in response to the worst oil spill in U.S. history.

Shares of BP sank nearly 15% Tuesday after the company's latest attempt to seal the leaking Gulf oil well failed over the weekend. Since the accident happened April 20, BP shares have fallen nearly 40%, wiping out nearly $70 billion in shareholder value.

However, the stock rose 3% Wednesday as shares of energy companies lead a broad-based rally on Wall Street.

BP is currently attempting to contain the flow of oil from the well, located nearly a mile below the surface, after repeated efforts to plug it did not succeed.

BP (BP) did not immediately respond to phone calls for comment about the letter from Schumer and Wyden.  To top of page

Search for Jobs

Index Last Change % Change
Dow 19,756.85 142.04 0.72%
Nasdaq 5,444.50 27.14 0.50%
S&P 500 2,259.53 13.34 0.59%
Treasuries 2.46 0.08 3.23%
Data as of 8:01am ET
Company Price Change % Change
Bank of America Corp... 23.09 0.14 0.61%
Ford Motor Co 13.17 0.14 1.07%
Chesapeake Energy Co... 7.72 0.12 1.58%
Twenty-First Century... 28.21 -0.43 -1.50%
Apple Inc 113.95 1.83 1.63%
Data as of Dec 9
Sponsors

Sections

Even Carl Icahn, one of President-elect Donald Trump's biggest cheerleaders on Wall Street, thinks the post-election exuberance in the stock market has gotten a bit out of hand. More

Republican leaders keep saying Obamacare is hurting the economy and killing jobs, but there's scant evidence for it. In fact, a number of studies show that the economy has been growing. More

Facebook admits it messed up more ad metrics than previously thought, potentially eroding its trust and relationship with marketers and publishers. More

The Los Angeles city attorney is suing four major retailers over claims that they deliberately inflated the original price on some items that misled customers into thinking they were getting a better deal. More