By Anna Driver
VENICE, La., June 4 (Reuters) - BP began capturing oil spewing from its ruptured Gulf of Mexico well on Friday and President Barack Obama warned the company against 'nickel and diming' residents and businesses hurt by the 46-day spill.
With tar balls washing ashore in Florida and political pressure on BP Plc to free up cash for damages, company executives told investors they were putting off a decision on whether to suspend the next quarterly dividend.
'Future decisions on the quarterly dividend will be made by the Board, as they always have been, on the basis of the circumstances at the time,' the British energy giant said in a statement. Its annual dividend totals $10.5 billion.
BP CEO Tony Hayward said the company had plenty of money to meet its obligations, including $5 billion in cash and additional credit lines it could tap. It has already spent well over $1 billion on its oil spill response.
Obama, facing a monumental test amid criticism he has failed to demonstrate leadership or emotion in the crisis, showed a flash of anger as he seized on the dividend issue in a meeting with state and local officials in Kenner, Louisiana.
'They say they want to make it right. That's part of their advertising campaign. Well, we want them to make it right,' said Obama, who attacked BP for paying for image-conscious television ads and considering a possible $10.5 billion dividend payout.
It was Obama's third trip to the region since the April 20 rig explosion that killed 11 workers and triggered the worst oil spill in U.S. history. He has said he was 'furious' at the disaster, which threatens fishing and tourism, two of the cornerstones of the local economy.
BP made progress late on Thursday when it was able to attach a containment cap atop the ruptured well. It would take a few days for the operation to reach optimum performance, at which point the company hoped to be able to siphon off 90 percent of the leaking oil.
The U.S. Coast Guard said the containment cap placed atop the gusher a mile (1.6 km) beneath the Gulf's surface was collecting about 1,000 barrels a day.
Obama said it was way too early to say whether the latest effort would be successful.
White House spokesman Robert Gibbs told reporters on Air Force One that the cap is taking in more hydrocarbons and fewer of the frozen, slushy hydrates that gummed up an earlier attempt to cap the gusher.
It was a sign of progress after several failed attempts by BP. U.S. officials cautioned against being too optimistic, however. 'They were making some slow progress,' Gibbs said.
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BP's share price, which has fallen sharply since the beginning of the crisis, gyrated in London and New York. Standard & Poor's cut BP's credit rating to AA-minus from AA, following the example of two other rating agencies on Thursday.
The cost of credit default swaps insuring the debt of companies affected in the oil spill also fell on Friday. BP's debt protection costs fell 27 basis points to 218 basis points, or $218,000 per year for five years to insure $10 million in debt, according to Markit Intraday.
But analyst Alan Sinclair of Seymour Pierce said, 'My take on the underlying message is that the dividend is safe ...'
FLORIDA BRACES
Oil sheen and tar balls washed ashore on a northwest Florida beach crowded with holidaymakers in what appeared to be the spill's first impact on the state.
'You see shells and jellyfish and trash, but I've never seen oil here. It's crazy,' said Anthony Cross, while walking along Pensacola Beach with his three daughters, holding a child's fishing net full of tar.
Florida, the so-called Sunshine State with a $60 billion-a-year tourism industry, has been bracing this week for the forecasted arrival of the spilled oil, which has already hit Louisiana, Mississippi and Alabama shores to the west.
BP does not expect to be able to fully halt the oil flow until August, when two relief wells are to be completed.
The amount of oil being captured should increase as BP closes vents to trap more oil, Coast Guard Admiral Thad Allen told reporters in a conference call.
BP Chief Operating Officer Doug Suttles told U.S. television networks that the containment cap 'should work' by capturing upward of 90 percent of the gushing oil.
One thousand barrels is a small fraction of the 19,000 barrels per day that the U.S. government has estimated could be gushing from the well.
Hayward vowed BP will 'stand by our obligations.'
'We will halt this spill and put right the damage that has been done,' he said.
The BP CEO had to apologize after angering Gulf residents by saying last weekend that 'I'd like my life back.'
Obama is confronting one of the biggest tests of his presidency as his party girds for tough congressional elections in November. He called off a trip to Australia and Indonesia set for this month to focus on the spill, amid criticism over his handling of the crisis.
(Additional reporting by Chris Baltimore and Kristen Hays in Houston, Jeff Mason in Kenner, La., Sarah Young in London and Jane Ross in Pensacola, Writing by Steve Holland; editing by Paul Simao) Keywords: OIL SPILL/ (matt.bigg@thomsonreuters.com; +1 404 720-2891; Reuters Messaging: matt.bigg.reuter.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
VENICE, La., June 4 (Reuters) - BP began capturing oil spewing from its ruptured Gulf of Mexico well on Friday and President Barack Obama warned the company against 'nickel and diming' residents and businesses hurt by the 46-day spill.
With tar balls washing ashore in Florida and political pressure on BP Plc to free up cash for damages, company executives told investors they were putting off a decision on whether to suspend the next quarterly dividend.
'Future decisions on the quarterly dividend will be made by the Board, as they always have been, on the basis of the circumstances at the time,' the British energy giant said in a statement. Its annual dividend totals $10.5 billion.
BP CEO Tony Hayward said the company had plenty of money to meet its obligations, including $5 billion in cash and additional credit lines it could tap. It has already spent well over $1 billion on its oil spill response.
Obama, facing a monumental test amid criticism he has failed to demonstrate leadership or emotion in the crisis, showed a flash of anger as he seized on the dividend issue in a meeting with state and local officials in Kenner, Louisiana.
'They say they want to make it right. That's part of their advertising campaign. Well, we want them to make it right,' said Obama, who attacked BP for paying for image-conscious television ads and considering a possible $10.5 billion dividend payout.
It was Obama's third trip to the region since the April 20 rig explosion that killed 11 workers and triggered the worst oil spill in U.S. history. He has said he was 'furious' at the disaster, which threatens fishing and tourism, two of the cornerstones of the local economy.
BP made progress late on Thursday when it was able to attach a containment cap atop the ruptured well. It would take a few days for the operation to reach optimum performance, at which point the company hoped to be able to siphon off 90 percent of the leaking oil.
The U.S. Coast Guard said the containment cap placed atop the gusher a mile (1.6 km) beneath the Gulf's surface was collecting about 1,000 barrels a day.
Obama said it was way too early to say whether the latest effort would be successful.
White House spokesman Robert Gibbs told reporters on Air Force One that the cap is taking in more hydrocarbons and fewer of the frozen, slushy hydrates that gummed up an earlier attempt to cap the gusher.
It was a sign of progress after several failed attempts by BP. U.S. officials cautioned against being too optimistic, however. 'They were making some slow progress,' Gibbs said.
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
FOR FULL COVERAGE http://link.reuters.com/hed87k
BREAKINGVIEWS:
INSIDER TV: http://link.reuters.com/zyx77k
GRAPHIC: http://link.reuters.com/vag38k
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
BP's share price, which has fallen sharply since the beginning of the crisis, gyrated in London and New York. Standard & Poor's cut BP's credit rating to AA-minus from AA, following the example of two other rating agencies on Thursday.
The cost of credit default swaps insuring the debt of companies affected in the oil spill also fell on Friday. BP's debt protection costs fell 27 basis points to 218 basis points, or $218,000 per year for five years to insure $10 million in debt, according to Markit Intraday.
But analyst Alan Sinclair of Seymour Pierce said, 'My take on the underlying message is that the dividend is safe ...'
FLORIDA BRACES
Oil sheen and tar balls washed ashore on a northwest Florida beach crowded with holidaymakers in what appeared to be the spill's first impact on the state.
'You see shells and jellyfish and trash, but I've never seen oil here. It's crazy,' said Anthony Cross, while walking along Pensacola Beach with his three daughters, holding a child's fishing net full of tar.
Florida, the so-called Sunshine State with a $60 billion-a-year tourism industry, has been bracing this week for the forecasted arrival of the spilled oil, which has already hit Louisiana, Mississippi and Alabama shores to the west.
BP does not expect to be able to fully halt the oil flow until August, when two relief wells are to be completed.
The amount of oil being captured should increase as BP closes vents to trap more oil, Coast Guard Admiral Thad Allen told reporters in a conference call.
BP Chief Operating Officer Doug Suttles told U.S. television networks that the containment cap 'should work' by capturing upward of 90 percent of the gushing oil.
One thousand barrels is a small fraction of the 19,000 barrels per day that the U.S. government has estimated could be gushing from the well.
Hayward vowed BP will 'stand by our obligations.'
'We will halt this spill and put right the damage that has been done,' he said.
The BP CEO had to apologize after angering Gulf residents by saying last weekend that 'I'd like my life back.'
Obama is confronting one of the biggest tests of his presidency as his party girds for tough congressional elections in November. He called off a trip to Australia and Indonesia set for this month to focus on the spill, amid criticism over his handling of the crisis.
(Additional reporting by Chris Baltimore and Kristen Hays in Houston, Jeff Mason in Kenner, La., Sarah Young in London and Jane Ross in Pensacola, Writing by Steve Holland; editing by Paul Simao) Keywords: OIL SPILL/ (matt.bigg@thomsonreuters.com; +1 404 720-2891; Reuters Messaging: matt.bigg.reuter.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.