BP shares lower as CEO tells Congress he’s ‘devastated’ but doesn’t have all the answers

BP shares lower as CEO testifies to Congress

Shares of BP PLC zigzagged up and down on Thursday as the company’s CEO tangled with lawmakers over the cause of the well blowout in the Gulf of Mexico.

BP’s U.S.-traded shares were down 25 cents at $31.61 late in the trading session. They rose to $32.46 in the morning and dipped as low as $31.25 in the afternoon.

The slide wiped out some of the gain from the day before, when BP shares rose after the company agreed to pay into a $20 billion compensation fund and to suspend dividends the rest of this year.

CNBC reported Thursday that BP was considering a bond offering of $5 billion to $10 billion. Analysts said a successful offering could boost confidence that the company will survive in the face of uncertain liability for the largest oil spill in U.S. history.

In Congress, lawmakers grilled BP CEO Tony Hayward about the April 20 blowout and asked whether the company took moneysaving shortcuts that might have contributed to the accident.

Hayward repeatedly told members of a House energy subcommittee that it was too early to know what caused the explosion. He refused to debate decisions made by BP engineers on the Deepwater Horizon drilling rig, which executives of other oil companies said this week defied industry standards.

“I wasn’t involved in any of the decision-making,” Hayward said. He said he was sorry about the accident, which killed 11 workers and left a gaping well that’s still spewing oil into the Gulf.

BP’s shares have fallen almost by half since the accident.

Pavel Molchanov, an analyst with Raymond James, said Hayward was being properly vague in answering lawmakers’ questions about specific technical decisions made on the drilling rig.

“He doesn’t want to say something which will later be proven wrong,” Molchanov said. He said Thursday’s hearing was political theater that won’t have much bearing on BP shares.

“What matters for investors isn’t what Tony Hayward says,” Molchanov said. “It’s getting the well capped, getting our hands around the magnitude of damages — $20 billion is a floor, not a ceiling — and cooling down the political rhetoric in Washington.”

At home in the U.K., concern is growing that BP’s problems could hurt pension funds that hold major stakes in the company. Britain’s populist Daily Mail tabloid defended BP against “a show trial by American politicians,” and warned that British retirees could end up paying for the oil spill cleanup.

Associated Press Writer Raphael G. Satter in London contributed to this report.