BP stock drops nearly 10%

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- BP's shares ended nearly 10% lower on Monday -- the 56th day of the oil spill -- as the oil giant geared up for another brutal week in the Gulf and on Capitol Hill.

London-based BP (BP), which held a board meeting on Monday, is weighing whether to issue its $2.4 billion second quarter dividend, which is set to be paid out in August. BP said on Friday it has not made any decision regarding the payment and that the matter "will be decided sometime between now and July 27." (See correction, below.)

The issue is controversial since the company will have to pay billions of dollars to cover the massive economic and environmental damage caused by the ongoing oil spill in the Gulf of Mexico. Some lawmakers say they're concerned about whether the company can afford to pay for the clean up and the dividend.

"To pay a dividend, they're risking more public anger, particularly in the U.S.," said Brian Gallagher, a BP analyst with Dolmen Securities Ltd. in Ireland.

On Tuesday and Thursday, BP executives will appear before Congressional committees to testify about the spill, which has been pouring oil into the Gulf since the Deepwater Horizon offshore oil rig exploded and sank on April 20, killing 11 workers. As much as 40,000 barrels of oil, or 1.7 million gallons, are leaking per day, according to government estimates.

BP Chief Executive Tony Hayward is scheduled to testify before Congress on Thursday.

BP executives, including Chairman Carl-Henric Svanberg, are scheduled to meet with President Obama on Wednesday. The president wants the company to create a BP-funded escrow account to pay damages to individuals and businesses hurt by the spill.

Obama is making his fourth visit to the Gulf region since the April disaster on Monday. On Tuesday, he'll return to Washington to deliver an 8 p.m. ET televised address to deliver a speech on the oil spill.

BP was not immediately available for comment.

Correction: An earlier version of this story incorrectly stated which quarterly dividend is in question. To top of page

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