Two bits of breaking news, since, if you’re a BP shareholder, you’ll be left with two bits,
BP and the Obama administration have reached a preliminary agreement under which the company will place $20 billion in an escrow account to pay claims stemming from the oil spill in the Gulf of Mexico, President Obama announced Wednesday after meeting with senior BP officials.
The agreement calls for BP to make two payments into the escrow account this year, then a payment each quarter over the next several years until the $20 billion amount is reached. Obama also announced that BP had agreed to create a $100 million fund for oil industry workers left jobless.
The fund will be administered by Kenneth Feinberg, the Washington lawyer who oversaw a similar fund for victims of the Sept. 11 terror attacks and who more recently was the Obama administration’s special master for executive compensation.
BP PLC said it was canceling dividend payments for much of this year, a move that will disappoint shareholders but will help to ease the political pressure the company has come under since its well began spilling oil into the Gulf of Mexico.
In a statement, Chairman Carl-Henric Svanberg said the board regretted the move, but concluded it was in the “best interests of the company and its shareholders.” He said canceling the dividend would underline BP’s commitment to meeting its obligations on the spill and would bring “greater clarity” to the company’s shareholders.
The company said it was canceling its previously declared first-quarter dividend and would not be paying interim dividends in the second and third quarters either. It said it would decide later whether to restart dividends in 2011.
In other BP news,
Brazil Reviews BP Purchase of Devon Energy Assets, Times Says
Brazil’s oil-industry regulator is reviewing BP Plc’s $7 billion agreement to buy deep-water assets owned by Devon Energy Corp. of the U.S., the London-based Times reported.
The Agencia Nacional do Petroleo, which grants licenses and supervises safety in the Brazilian oil industry, told the newspaper the transaction is being examined and no decision has yet been taken on whether to approve it.
The purchase of Devon Energy assets in Brazil’s Campos and Camamu-Almada basins, which lie at depths of as much as 2,780 meters (9,120 feet), as well as two onshore licenses in the Parnaiba basin, was announced on March 11.
Magda Chambriard, who heads the Brazilian watchdog, and Raphael Moura, the official responsible for safety issues, will meet with BP in Houston next week for talks on the Deepwater Horizon catastrophe in the Gulf of Mexico, the newspaper said.
Spokesmen for both BP and Devon said yesterday there’s no indication that permission for the transaction, which also includes assets in the Gulf of Mexico and Azerbaijan, will be withheld, the Times added.
The stock has already been downgraded, and the price is falling.
How about the “medium” and “large” people?