Senators call on BP to suspend dividend payment until clean-up costs for Gulf spill are known

Senate Dems to BP: Suspend dividend payment

WASHINGTON — Two Democratic senators pressed BP on Wednesday to delay plans to pay shareholder dividends worth an expected $10 billion or more until the full costs for cleaning up the oil spill in the Gulf of Mexico are calculated.

Sens. Chuck Schumer of New York and Ron Wyden of Oregon called it “unfathomable” that the oil giant would pay out a dividend to shareholders before the total cost of the cleanup is known. In a letter to BP CEO Tony Hayward, the lawmakers said taking action to “move money off of the company’s books” will make it more difficult for BP to pay the U.S. government, fishermen and others affected by the environmental disaster.

BP PLC has paid an estimated $1 billion to clean up the oil leak and expects to spend billions more.

BP spokesman Toby Odone called the distribution of dividends “a company matter” that will be decided by company leaders. BP paid $10.4 billion in dividends last year and $10.3 billion in 2008.

Hayward and other BP leaders have repeatedly said the company will pay all legitimate claims related to the oil spill, despite a $75 million liability cap for damages under federal law.

“We’ve already paid over $1 billion, so there’s no question that we’re already paying for this cleanup. So I don’t know what point the senator is making,” Odone said. “We’re committed to paying for the spill response and cleanup.”

Schumer and Wyden said BP should maintain high capital reserves to ensure it has the resources to deal with a worst-case scenario.

Transocean Ltd., the owner of the Deepwater Horizon rig that exploded April 20, said last month it would distribute $1 billion to shareholders. Wyden, Schumer and 16 other senators have urged Attorney General Eric Holder to investigate the transfer of funds at a time when Transocean could be liable for major claims.

BP’s potential liability could “dwarf Transocean’s,” the senators said, calling any decision by BP to go forward with its dividend troubling.

Associated Press writer Chris Kahn in New York contributed to this report.