UPDATE: Pelosi: BP Must Compensate Gulf Residents Before Paying Dividends

11th Jun 2010 17:39

(Updates with comment from BP spokesman, further comment from Pelosi, background.) By Corey Boles Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--House Speaker Nancy Pelosi (D., Calif.) lashed out at BP PLC (BP) Friday, saying the oil giant must compensate business owners and workers in the Gulf Coast region for their lost earnings before it pays a dividend to its shareholders. In a series of sharp comments directed at the beleaguered energy company, the top House Democrat said there was empirical evidence that BP isn't paying claims to Gulf residents in a timely manner. She said she fully understood the company's "fiduciary responsibility to its shareholders" but stressed that BP "must pay its bills." The Wall Street Journal reported Friday that BP is mulling either deferring or reducing its second quarter dividend, due to be paid to shareholders on July 27. Pelosi said it would be good public relations if the company did a better job of actually meeting claims for compensation rather than launching an expensive television advertising campaign saying it would pay such claims. John Pack, a spokesman for BP, said the company had so far processed 20,000 of the 40,000 compensation claims it had received, paying out $53 million to local residents. He said the turn-around time for payouts was five days on average for individuals and seven days for small businesses. The company is working with Admiral Thad Allen, the administration's point man for handling the disaster, and his staff to reduce that time further, Pack said. The advertising campaign is part of the company's efforts to educate the wider American public as to what it is doing, he said. Leading up to the explosion and subsequent sinking of an offshore oil drilling platform it controlled, Pelosi said the company had lied about the technology it had to prevent such a disaster. And in the more than seven weeks since the destruction of the rig led to the worst oil spill in U.S. history, Pelosi said the company had repeatedly misrepresented the amount of oil gushing into the Gulf. The BP spokesman said the company has provided data and high resolution video to the Unified Command, but hadn't been releasing its own estimate of the number of barrels of oil pouring into the Gulf. The initial public estimates when the crisis first began were that roughly 1,000 barrels a day were leaking from the well. That grew exponentially by the end of May to an estimate of between 12,000 to 19,000 barrels a day. On Thursday, the director of the U.S. Geological Survey said the well was likely releasing between 20,000 and 40,000 barrels daily before BP began to capture some of the oil last week. The California Democrat said she supported removing the liability cap on the amount that oil companies must pay in the event of spill disasters, and that she was pleased Attorney General Eric Holder had sent investigators to the region to see if there evidence BP had acted negligently. The current cap is $75 million, but lawmakers in both the House and Senate are pushing legislation that would remove it altogether. Looking forward to next week when the heads of the five largest oil companies will testify before a House panel, Pelosi said she wanted to hear the executives speak with integrity. She made it clear she wasn't "painting the rest of them with the BP brush". Any taxpayer money spent in the Gulf region as part of the cleanup or in compensation to residents must be fully reimbursed by the British oil company, Pelosi said. BP's New York listed shares were recently trading up $1.01, or 3.14%, to $33.84. -By Corey Boles, Dow Jones Newswires; 202-862-6601; [email protected] (END) Dow Jones Newswires June 11, 2010 12:39 ET (16:39 GMT)