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

Recruitment Genius: Telesales & Customer Service Executives - Outbound & Inbound

£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...

Recruitment Genius: National Account Manager / Key Account Sales

£30000 - £35000 per annum: Recruitment Genius: An opportunity has arisen for a...

Recruitment Genius: Operations Manager

£30000 - £35000 per annum: Recruitment Genius: An exciting opportunity to join...

Recruitment Genius: Recruitment Consultant

£30000 - £35000 per annum: Recruitment Genius: We have an excellent role for a...

Day In a Page

Read Next
 

Letter from the Political Editor: Mr. Cameron is beginning to earn small victories in Europe

Andrew Grice
Pakistani volunteers carry a student injured in the shootout at a school under attack by Taliban gunmen, at a local hospital in Peshawar  

The Only Way is Ethics: The paper’s readers and users of our website want different things

Will Gore
Surrounded by high-rise flats is a little house filled with Lebanon’s history - clocks, rifles, frogmen’s uniforms and colonial helmets

Clocks, rifles, swords, frogmen’s uniforms

Surrounded by high-rise flats is a little house filled with Lebanon’s history
Return to Gaza: Four months on, the wounds left by Israel's bombardment have not yet healed

Four months after the bombardment, Gaza’s wounds are yet to heal

Kim Sengupta is reunited with a man whose plight mirrors the suffering of the Palestinian people
Gastric surgery: Is it really the answer to the UK's obesity epidemic?

Is gastric surgery really the answer to the UK's obesity epidemic?

Critics argue that it’s crazy to operate on healthy people just to stop them eating
Homeless Veterans appeal: Christmas charity auction Part 2 - now LIVE

Homeless Veterans appeal: Christmas charity auction

Bid on original art, or trips of a lifetime to Africa or the 'Corrie' set, and help Homeless Veterans
Pantomime rings the changes to welcome autistic theatre-goers

Autism-friendly theatre

Pantomime leads the pack in quest to welcome all
The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'