BP said it won’t issue further dividends in 2010 and agreed to set aside $20 billion to help pay for claims as a result of the Gulf oil disaster. BP’s Chairman made the dividend disclosure after a meeting with President Barack Obama.
The U.K.-based oil company said it is able to generate $30 billion in cash flow from its global operations above and beyond the Gulf oil spill costs. BP said it will create the $20 billion claims fund over the next three and a half years. BP will pay $3 billion into the fund in the third quarter of this year, and another $2 billion in the fourth quarter. These will be followed by payments of $1.25 billion per quarter until the $20 billion has been paid in, BP said. The fund will be available to satisfy legitimate claims including natural resource damages and state and local response costs. Fines and penalties will be excluded from the fund and paid separately, BP said.
BP agreed to set aside an additional $100 million for workers who lost their jobs as a result of a deep-water drilling moratorium imposed by the President. The size of the spill was again revised upward, as the latest government figures released estimate 35,000 to 60,000 barrels is gushing from the mile-deep well in the Gulf daily. The rate of oil spewing out daily was originally estimated in April at 1,000 barrels and has been updated several times.
Richard J. Arsenault, 2011
