BP: We have the $$$ to pay for spill

By Steve Hargreaves, senior writer


NEW YORK (CNNMoney.com) -- BP sought to reassure both the general public and investors Friday, saying it has the money to spend whatever it takes to clean up the Gulf oil spill.

"Our first call on dollars is to ensure we do everything we can to get the Gulf Coast back to normal," BP Chief Executive Tony Hayward said on a conference call with investors. "But that still leaves us with plenty of dollars to spend on other things."

An executive on the call noted BP (BP) generated $30 billion in cash flow over the last four quarters.

The spill has so far cost BP just over $1 billion. Estimates as to how much it will ultimately cost range from $3 billion to $40 billion, although that amount would likely be paid out over a number of years.

Hayward said the amount the company is spending per day in the Gulf could be "diminished dramatically" if the cap they put over the well Thursday is successful in channeling most oil to the surface. The success of that cap should be known in the next 24 hours.

He also sought to reassure investors that the company will not only pay its current commitments, but still has enough money to invest in its core business - finding and selling new oil.

To that end, he said the firm is creating a separate organization to deal with the oil spill, so the rest of the company is not distracted.

Hayward expects deep water drilling and oil production to ultimately resume in the Gulf, albeit under stricter safety standards.

President Obama has issued a six month halt to new deepwater drilling pending an investigation into the accident April 20 that claimed 11 lives and a more thorough review of drilling safety and procedures in general.

Some have called on BP to suspend its dividend in the wake of the spill, saying the money should be set aside for clean-up costs and damages rather than returned to investors. Last year, the company returned more than $10 billion to shareholders.

But BP executives said the company has a commitment to not only the Gulf of Mexico and its residents, but to the company's 80,000 employees, the hundreds of thousands of people that invest in the firm, and the millions who receive the dividend as part of pension plans.

"BP faces this situation as strong company," said Hayward. "We will stand behind all our commitments."

Carl-Henric Svanberg, BP's chairman, said decisions on the size of the dividend will be made "how they've always been," which is based on the financial health of the company at the time. He said final decision on the dividend will be made in late July.

There have also been proposals by U.S. lawmakers to force BP to stop paying the dividend. Svanberg said those proposals are "something we'll have to follow."

Earlier this week, Sen. Charles Schumer, D-N.Y., and Sen. Ron Wyden, D-Ore., said paying a dividend before the ultimate cost of the disaster has been tallied would be "unfathomable." To top of page

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