UPDATE: No 2Q Dividend Decision Expected Monday -BP

14th Jun 2010 12:06

(Adds background) By James Herron Of DOW JONES NEWSWIRES LONDON (Dow Jones)--No decision is expected from Monday's BP PLC (BP) board meeting on whether it will pay its full second quarter dividend, said a spokeswoman for the company Monday. BP has been subject to immense political pressure to suspend the payment as oil continues to spill from its well in the Gulf of Mexico. U.S. lawmakers have demanded it suspend payments until the crisis is over, voicing concerns that BP will not be able to meet all compensation and cleanup costs if it continues with the payment to shareholders of 56 cents a share. BP says it has the financial strength to pay all cleanup costs and legitimate compensation claims. The company said Monday that it has spent $1.6 billion so far on containment, cleanup and compensation related to the spill. Analysts estimate the full cost of the spill at anywhere between $3 billion and $30 billion. BP could also face civil penalties of up to $1,100 a barrel of oil spilled, rising to $4,300 a barrel if criminal negligence were to be proved. Most analysts say BP will be able to meet these liabilities and continue to pay the dividend from a purely financial standpoint, but acknowledge that it may be necessary to reduce or briefly suspend dividend payments to assuage politicians in the U.S. BP Chief Executive Tony Hayward told the Wall Street Journal last week that the board of directors could consider cutting or deferring the second-quarter dividend that is due to be announced July 27. It could also pay all or part of it in "scrip," effectively an I.O.U. to shareholders. "We are considering all options on the dividend. But no decision has been made," Hayward said. White House officials Sunday said they wanted BP to put "substantial" funds into an escrow account to cover claims by Gulf Coast businesses and residents affected by the spill. -By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected] (END) Dow Jones Newswires June 14, 2010 07:06 ET (11:06 GMT)