The “decision to suspend the dividend was taken by the board,” Hayward told the U.K. Energy and Climate Committee in London. It was “taken in the interest of preserving the financial strength of BP and in the interests of shareholders.”
Committee Chairman Tim Yeo asked whether President Barack Obama’s administration had pressured the company to cut payment to shareholders in favor of compensating victims of the spill. The disaster became an issue in U.S.-British relations as Obama demanded the U.K.’s biggest energy producer set aside $20 billion in a fund to compensate victims and pay for cleanup.
“I’d like to explore whether BP feels there is a degree of political risk to operating in the U.S. at present,” Yeo said in a telephone interview yesterday. “There was a bit of a witch hunt taking place against BP, and that’s something which was a legitimate matter of concern for the U.K.”
Today’s hearing is likely to be Hayward’s last public appearance before he steps down at the end of the month to be replaced by Bob Dudley, an American.
The hearing comes as BP seeks approval to drill a well off the coast of Scotland almost as deep as the one in the Gulf that caused the worst leak in U.S. history. Hayward said no final decision has been taken on the well and drilling won’t start until next year. The well is set to be drilled near the Shetland Islands 1,950 meters under water (6,400 feet).
Four out of BP’s five North Sea installations last year failed to comply with emergency regulations in the case of a spill, the Financial Times reported today, citing inspection records obtained under the U.K. Freedom of Information Act.
Hayward said today there’s no “fundamental weakness” in the company’s North Sea operations.
BP shares fell 2.7 percent to close at 404.1 pence in London today. The company has lost 38 percent of its market value since the April 20 disaster in the Gulf of Mexico.
While the parliamentary committee isn’t responsible for approving drilling plans, Yeo said yesterday the government doesn’t need to stop U.K. deepwater exploration.
“I don’t think there’s any need for a moratorium at this stage,” Yeo said. “At a time when Britain is moving into a situation of heavy dependence on imported oil and gas, it’s very desirable that we should exploit the reserves in our waters.”
London-based BP last week published a report on the causes of the leak after an investigation led by Bly. The company said that both BP managers and other companies made mistakes that led to the explosion on the Deepwater Horizon rig that killed 11 people and started the leak.
The blame for many of the mistakes rests primarily with rig owner Transocean Ltd., Halliburton Co., which cemented the well, and Weatherford International Ltd., which provided valves for the well, according to the 234-page report released Sept. 8 after a probe by more than 50 BP engineers, geologists and hired investigators.
“Clearly there were serious human errors in the case of the Deepwater Horizon, and their equipment failures,” Yeo said. “We need to examine those to see whether procedures need to be changed. In light of the Bly report, there will be some lessons we want to learn.”