BP Chairman Svanberg to Meet With Obama on Oil Spill
BP Plc Chairman Carl-Henric Svanberg is being summoned to Washington for a meeting with President Barack Obama as politicians step up pressure on the company to settle damage claims and suspend the dividend.
Coast Guard Admiral Thad Allen, the government’s national incident commander, requested the June 16 meeting in a letter addressed to Svanberg at the company’s London headquarters yesterday. He asked for the chairman and other “appropriate” company representatives to meet with senior administration officials to discuss the company’s response to the oil spill in the Gulf of Mexico. Allen said Obama will “participate in a portion” of the session.
“The BP Deepwater Horizon spill has had a profound impact on Americans living in the Gulf region and time is of the essence in resolving these issues,” Allen wrote. A government team of scientists said yesterday the damaged well may have been gushing as much as 40,000 barrels of oil a day, twice as much as previous estimates.
The meeting will be Obama’s first direct communication with BP representatives since the April 20 explosion of the Deepwater Horizon rig that killed 11 people and triggered the spill. It also comes as some U.S. lawmakers are calling on BP to suspend its dividend to pay for cleanup and economic losses and questioning the integrity of the company’s public statements.
BP has received the invitation “and an appropriate senior delegation would of course be glad to attend,” company spokesman Max McGahan said in a telephone interview.
BP shares rose for the first time this week, gaining as much as 8.9 percent and trading at 395.25 pence as of 1:20 p.m. in London. They have plunged 40 percent since the accident and touched a 13-year low yesterday.
The board is considering deferring payment of the second- quarter dividend and putting the funds in an escrow account, the London-based Times reported today, without saying where it got the information. BP Chief Executive Officer Tony Hayward said that the company is “considering all options on the dividend,” the Wall Street Journal reported, citing an interview.
“No decision has been made,” BP spokesman Robert Wine said in a telephone interview in London. “It won’t be made until results are announced in July.”
This follows comments made by Svanberg on a conference call with investors last week. “Future decisions on the quarterly dividend will be made as they always have been, on the basis of all circumstances at the time,” he said. A group of lawmakers this week called on BP to suspend the dividend until the cleanup is paid for.
“As the president has said, our administration is not going to rest or be satisfied until the leak is stopped at the source, the oil in the Gulf is contained and cleaned up, and the people of the Gulf are able to go back to their lives and their livelihoods,” Allen wrote.
While Allen didn’t seek the presence of Hayward, he did ask for “any appropriate officials from BP.” The meeting is scheduled a day before Hayward appears before a House Energy and Commerce oversight hearing examining the cause of the spill.
Administration officials previously have said there wasn’t a need for Obama to speak directly with BP representatives. Additionally, with investigations of BP under way by the Justice Department, putting the president in direct contact with the company’s CEO might complicate any probe.
Anything Hayward says, even in the context of a conversation with Obama, could be significant, according to Lawrence Barcella, a former federal prosecutor who is now an attorney at the Paul Hastings firm in Washington. Meeting with Svanberg poses less of a risk, he said.
Hayward “has been very involved both operationally and optically from the beginning,” Barcella said. “This likelihood of him being a substantive witness at a minimum, in one or more of the investigations, is extremely high. The chairman, on the other hand, has not been as public or operationally involved so the risk factor lessens.”
The president also has expressed anger over Hayward’s May 30 comments about the spill’s impact on him, saying he “wanted my life back.” Hayward subsequently apologized.
“He wouldn’t be working for me after any of those statements,” Obama said in a June 7 interview for NBC’s “Today Show.”
There may also be political risk for Obama in a meeting with Hayward, who has been the public face of BP.
A June 8 Washington Post-ABC News poll showed 81 percent of Americans said BP’s response has been not so good or poor, and 64 percent want the government to pursue criminal charges against the company. Sixty-nine percent rated the government’s reaction poorly.
“The relationship between BP and the federal government is not a partnership, and there is no moral equivalency between the president of the United States and the man potentially responsible for the worst environmental disaster in history,” Democratic strategist Paul Begala said of Hayward.
Obama met yesterday with the families of workers killed in the explosion and promised the U.S. won’t go forward with new deepwater drilling until safety measures to prevent a similar incident are in place. He also plans to visit the Gulf region June 14 and 15 to review cleanup operations and talk with local officials.
The administration has stopped short of congressional calls for BP to forgo dividends. Still, Obama on June 4 in Louisiana said that if the company is able to pay dividends and buy advertising, “we better not hear about the nickel-and-diming” of business owners hurt by the spill and oil workers who have lost their jobs.
Hayward and Svanberg said on a conference call the same day that the decision will be made on July 27 whether to maintain the 14-cents-a-share quarterly dividend for the second quarter.
Bloomberg moderates all comments. Comments that are abusive or off-topic will not be posted to the site. Excessively long comments may be moderated as well. Bloomberg cannot facilitate requests to remove comments or explain individual moderation decisions.