BP's Dividend SUSPENDED -- And Stock Rallies

After intense public pressure, BP's dividend has been suspended, according to multiple news reports today.

The AP reports that "BP Chairman Carl-Henric Svanberg made the announcement Wednesday after emerging from the White House where he and other BP executives met for four hours with President Barack Obama." Today, President Obama was able to get BP to agree to place $20 billion in escrow to pay out victims claims, a fund that will be overseen by Obama's "pay czar" Kenneth Feinberg.

Analysts predicted that the dividend suspension would happen, according to a Bloomberg report earlier this morning. In addition to the $20 billion victims' fund, BP still has a significant amount of cash and lines credit it can draw from to pay for cleanup costs, Bloomberg reports:

"BP had $5 billion of cash available, $5.25 billion of credit lines it hadn't used and another $5.25 billion of stand- by bank facilities, BP said in an investor conference call June 4. Fitch said yesterday it expects BP's lenders to allow the company to use the credit lines if needed.

BP generated $27.7 billion in cash flow from operations last year and posted profit of $6 billion in the first quarter...The company has spent about $1.6 billion on containing and cleaning up the spill so far."

As you'll see from the below chart, BP's shares have rallied on the news of the $20 billion victims fund and the dividend suspension.

Comments

[coolmom64]

07:15 AM on 06/17/2010

Funny how the Tea Party movement wants less government and less taxes. Ironically, the US is not being bullied by a federal government but by greedy corporations. The banks and corporations are ruining the United States. People who hold BP stock in their portfolios or have real estate on the Gulf Coast are going through the grinder.

http://www.nemrits.com/gallery/pic/20100612100831

[bobell]

09:01 AM on 06/17/2010

yea. they should be in a union, then, no matter what, they would still get thier pensions.

[magstermi]

06:34 AM on 06/17/2010

I wonder how much the oil execs' bonuses will be this time. Of course they'll say they've suspended them, but come on--if the banks can do it, so can BP.

[Fritzie Borgwardt]

05:33 AM on 06/17/2010

When there's too much money involved, there's too little flexibility. Thats why government and the Courts HAVE to be able to impose flexibility when we need it. Otherwise, the planet is gone.

[showtel]

03:34 AM on 06/17/2010

BP didn't even see this as a marginal catastrophe until their stock dropped last week. Why? They were worried about saving oil and keeping on their prime directive, by law - to increase profits for their shareholders each quarter. If you are going to be legally a person, then you must mature as a person, and maturity, considers the long term consequences.

Consider Legally a person, from the film, THE CORPORATION --

http://www.youtube.com/watch?v=wkygXc9IM5U&feature=related

They are as power hungry as was the MMS and of course, Halliburton - 'absolute power corrupts absolutely' and with no regard to consequences.

[Fritzie Borgwardt]

04:54 AM on 06/17/2010

Imagine if one "person" (SCOTUS decision) did what BP just did in the name of profit. Crimes warranting capital punishment? Call for it, President Obama. Pull the US Military out of Afghanistan and drop rocks instead of bombs over the gusher. Then lock BP in jail and call for Capital Punishment. Given the 35,000 people killed in car accidents each year, terrorists could not do this much damage. Then go round up and destroy each and every nuke that's ever darkened our planet.

[Fritzie Borgwardt]

04:59 AM on 06/17/2010

Imagine if one "person" (SCOTUS decision) did what BP just did in the name of profit. Crimes warranting capital punishment? Call for it, President Obama. Pull the US Military out of Afghanistan and drop rocks instead of bombs over the gusher. Then lock BP in jail and call for Capital Punishment. Given the 35,000 people killed in car accidents each year, terrorists could not do this much damage. Then go round up and destroy each and every nuke that's ever darkened our planet. And in the case of a corporation, a complete takeover to protect stockholders might qualify as Capital Punishment.

[Kevin Atlanta]

02:34 AM on 06/17/2010

This is the first honest move the BP Brits have made. I'm sure it will absolutely devastate some of the pensioners that Tony was so concerned about...
Now America: Do you want a real cure to this kind of Corporate Fascist contempt of labor and the Citizens of the United States? It's long past time to make Corporate AmeriKKKa and the Corporate World out there understand we mean business and lift the Veil of the Corporate Person to expose the Boards of Directors, The Executives and the Stockholders to the Criminal Charges, Civil charges and restitution. It's time the myth of Corporate Personhood is lifted from the world as enshrined by the Roberts Corporate Court and the real biological People face the results of their actions like the rest of us. Put their sorry butts on the line just like 11 men did who died because of the Greed here and the 29 who died in Blankenship's mine...

[Laura McBride]

07:44 AM on 06/17/2010

Hear, hear! Fanned.

[Fritzie Borgwardt]

01:49 AM on 06/17/2010

What if the leak never stops? For those of you who espouse antiquated, sexist theories, this is not hysteria. I ask this question in a soft, calm voice. How can we live right now in a soft, calm way, if it never stops?

[Kevin Atlanta]

02:41 AM on 06/17/2010

What if the geological formation capping this deposit of oil collapses because of the hastily hacked well? The apocalyptic nature of what's out there now with the Coast Guard scrambling, the fishermen trying their best and only 32 skimmers... What of the sub-surface plumes of oil with it's chemistry changed by the toxic dispersants? They are at least 5 Exxon Valdez size spills submerged and poisoning the water column down to 1,000' and will move through the loop current into the Gulf Stream and after poisoning the east coast they will poison the Grand Banks fishing and eventually the arctic and English western coast. What if a hurricane blows up?
Because the Oil industry is focused on PROFIT for it's shareholders at any expense none of these Greedy Corporate fascists did any work to improve clean up and Shell is the worst with it's continuing poisoning of the Niger River delta that's been going on for years.
Imagine there's no heaven, and no religion too, Imagine there's no hunger, a brotherhood of man. imagine all the people living for today... You may say I'm a dreamer... John Lennon...

[murphy20]

03:21 AM on 06/17/2010

You're not far off, Fritzie. Looks like it is a race to get the secondary wells drilled before the well actually collapses on itself & the reservoir the well has tapped into empties out into the Gulf.

From an industry Blog of engineers, drillers, physicists: TOD:

"According to BP data from about five years ago, there are four separate reservoirs containing a total of 2.5 billion barrels (barrels not gallons). One of the reservoirs has 1.5 billion barrels. I saw an earlier post here quoting an Anadarko Petroleum report which set the total amount at 2.3 billion barrels. One New York Times article put it at 2 billion barrels.

If the BP data correctly or honestly identified four separate reservoirs then a bleed-out might gush less than 2 to 2.5 billion barrels unless the walls -- as it were -- fracture or partially collapse. I am hearing the same dark rumors which suggest fracturing and a complete bleed-out are already underway. Rumors also suggest a massive collapse of the Gulf floor itself is in the making. They are just rumors but it is time for geologists or related experts to end their deafening silence and speak to these possibilities."

http://www.theoildrum.com/node/6593#comment-648967

[Fritzie Borgwardt]

04:41 AM on 06/17/2010

What about rocks and rocks and rocks and rocks and maybe a little gorilla glue?
Courage Mr. President. You are David. They are Goliath.

[Asmodean1]

01:03 AM on 06/17/2010

the oil in the gulf is a DROP in the bucket to what is used..... america uses 22 MILLION barrels of oil every 24 hours.... this is a statistic from the usdept. of energy. forget the gulf... stop alll rigs now.

[SteveBrown]

11:37 PM on 06/16/2010

How magnanimous of the Big People to care about the Small People.

[eilish]

10:52 PM on 06/16/2010

That dang vomit reflex.......

[PharmaCan]

10:34 PM on 06/16/2010

I wonder if they will also cancel all the bonuses for the execs?

[gabby09]

03:24 AM on 06/17/2010

good point!

[murphy20]

03:25 AM on 06/17/2010

Not a chance. They need those bonuses for traveling money to get out of Dodge:

"All oilmen lie about everything. The stories one hears about the extent to which they will protect themselves are all understatements. BP employees are already taking The Fifth before grand juries, and attorneys are laying a path for company executives to make a run for it."

http://www.theoildrum.com/node/6593#comment-648967

[jasev01]

09:24 PM on 06/16/2010

this is messed up, everyone has to suffere because the gulf coast people are took slow to protect themselves.

[TXfemmom]

08:24 PM on 06/16/2010

I am sure that someone would have started using a guillotine on BP officials, had that dividend payment gone through.

[MARYHOBE]

06:32 PM on 06/16/2010

I cannot believe we are thinking of ending the moratorium on deep-water drilling. Reality should have set in by now. The best scientists and engineers are working the spill, and they can not stop it. It is beyond our technological ability, ecologists warned us and we went ahead. Now we pay the price and look for the culpable. It is the next person who asks that we resume that is culpable; and is that you?

[sublimaze]

06:43 PM on 06/16/2010

Very, very, very unfortunately, with the seafood industry decimated in the Gulf, oil drilling is the biggest industry left.

I think resuming work on rigs with excellent safety records (after complete inspections), with strict government oversight, would be reasonable. The oil obtained should then be taxed, with the revenues going towards building renewable energy plants.

[MARYHOBE]

07:04 PM on 06/16/2010

I understand the tough situation many may find themselves in and you know they have no choice but to reopen the deep water wells, but they will be gambling with the future of the planet. So if you get an opportunity try to find something else, after all they are what`s ruined the Gulf Coast, which was once one of the most beautiful places on earth.

[inthelandoftheblind]

02:15 AM on 06/17/2010

Some are so angry at the oil industry they want to shut down all the wells, but as you illustrated - without oil - we all come to a standstill...which would create more crisis.

The people who rely on the oil industry for work, are, naturally located near the spill, so they suffer it's impact the most viscerally.They also know they can't afford another financial hit, on top of the loss of fishing, & tourism - nor can this nation.The magnitude of just stopping all rigs, as some have suggested would soon cause our society to collapse.

Before any more new wells are drilled, if ever...I think relief wells should be drilled on all the existing wells at sea, first

Fanned & faved ya.

How ironic, at the same time.It's a microcosm of our need for & need to stop using oil.

[TXfemmom]

08:25 PM on 06/16/2010

They all had the SAME bogus response plan and they are going to permit them to drill? This country is bought and paid for by these oil companies.

[Kenneth Mundy]

06:26 PM on 06/16/2010

I would suggest that in the best interest of this country the 20 billion be administered by Goldman Sachs, as the prove to be the only intellegent intentity on the planet according to the Obama.

[meronnotu]

06:49 PM on 06/16/2010

when did he say that? how did you get so many fans?

[PharmaCan]

10:30 PM on 06/16/2010

how did you get so many fans?

ROFL - I'll fan you for that one!

[gabby09]

03:27 AM on 06/17/2010

fanned at #21. Clever one.

[maxfax]

07:55 PM on 06/16/2010

Isn't that one CEO's golden parachute?

[Martin Musetsky]

05:56 PM on 06/16/2010

Live feed of twelve cameras on the Gulf floor: http://climate.the-environmentalist.org/2010/06/live-video-feeds-of-gulf-oil-disaster.html

[maxfax]

07:56 PM on 06/16/2010

We need cameras on everything BP is doing, mostly not doing.