David Prosser: BP boss's impossible dilemma: keep the investors happy or the US government?

Share
Related Topics

Tony Hayward has less than seven weeks to decide who he is most worried about upsetting. On 27 July, BP must tell the stock market what it intends to pay as its second quarterly dividend of the year. Stick with the schedule that saw the oil giant hand out around £7bn worth of dividends last year and the political ramifications in the US don't bear thinking about. But then nor does the reaction of investors in BP, who have already cut its value in half since this crisis began, to a postponement or cancellation of the generous income they have got so used to receiving.

Mr Hayward can expect a pretty unpleasant encounter with the Congressional committee in front of which he is due to appear next week. He has no choice but to remain in the US for that hearing, but is now expected to return to the UK once that grilling is out of the way.

That reflects two calculations on BP's part. First, while Mr Hayward may face accusations that he is cutting and running, the chief executive's reputation in the US is now so damaged that more bad headlines are neither here nor there. It makes sense to hand over the US campaign to Carl-Henric Svanberg, BP's chairman, who has in any case faced criticism for his lack of visibility until now. Second, Mr Hayward may, from a London base, have a better chance of garnering political support for BP from the British Government. That's an important challenge: judging from the Prime Minister's comments yesterday, the Government has for now decided it is more interested in getting off to a good start with President Obama than defending one of its biggest companies.

BP has its political supporters in Britain. But the combined efforts of Boris Johnson and Lord Tebbit, both of whom came out fighting on its behalf yesterday, are unlikely to offer much in the way of protection from the White House. A more robust defence from David Cameron, on the other hand, might calm the President – at least in private, even if the intemperate rhetoric continues.

If Mr Hayward can secure his support, the Prime Minister might like to remind President Obama that it is not only British savers who will suffer if BP suspends dividend payments, or its value falls further. American institutions such as the California Public Employees Retirement System and the Texas Teachers Retirement System hold 25 per cent of the oil company's shares.

Individual investors – ordinary Joes all over the country – own a further 14 per cent of BP. It is not just the immediate economic victims of the oil spill who are suffering in the US, but all of those who are exposed to BP's financial fortunes.

React Now

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
iJobs Job Widget
iJobs General

Cover Supervisor

£75 - £90 per day + negotiable: Randstad Education Group: Are you a cover supe...

Marketing Manager - Leicestershire - £35,000

£30000 - £35000 per annum: Ashdown Group: Marketing Manager (CIM, B2B, MS Offi...

Marketing Executive (B2B and B2C) - Rugby, Warwickshire

£22000 - £25000 per annum: Ashdown Group: A highly successful organisation wit...

SEN Coordinator + Teacher (SENCO)

£1 per day: Randstad Education Leeds: Job Purpose To work closely with the he...

Day In a Page

Read Next
Piper Ryan Randall leads a pro-Scottish independence rally in the suburbs of Edinburgh  

i Editor's Letter: Britain survives, but change is afoot

Oliver Duff Oliver Duff
Some believe that David Cameron is to blame for allowing Alex Salmond a referendum  

Scottish referendum: So how about the English now being given a chance to split from England?

Mark Steel
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam