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News // Incidental

British government does not want to support British Petroleum with its oil catastrophe

03 June 2010 , 08:39Suzy Jagger, Catherine Philp, Robert LeaThe Times1575


David Cameron sought to distance himself from BP yesterday, dashing any hopes that he might intervene to repair the company’s appalling relations with Washington over the Deepwater Horizon oil spill in the Gulf of Mexico. The US Administration is now pursuing a criminal investigation into BP. Yesterday a spokesman for the Prime Minister said: “Clearly Mr Cameron is concerned about the situation but it is primarily a matter for the company.” It is understood that BP will meet Charles Hendry, the Energy Minister, today after a request by the company. It is also understood that the new Government has not asked to meet BP to discuss the spill. However, BP representatives briefed Energy Department officials at a recent event in Aberdeen. BP said: “We have not approached No 10 for assistance but have had conversations with officials to keep them up to date. We could well be talking to ministers over the next week or so.”


Shares in BP have lost a third of their value since the rig exploded in April. The shares closed down just 0.25p to 429.75p yesterday as investors began to believe the company would hold to its pledge not to cut the dividend. There was also speculation that BHP Billiton, the mining giant, may emerge as a white knight if BP has to sell its Gulf of Mexico assets. President Obama has vowed to bring justice to those responsible for the spill, describing it as the “greatest environmental disaster of its kind in our history”. The spill has contaminated the coast and fishing waters of Mississippi and Louisiana, is nearing Alabama and is likely to reach Florida in three days.


Analysts estimate that it will cost BP up to £20 billion. Tomorrow at a teleconference with investors, Tony Hayward, BP’s chief executive, is to be questioned on the financial impact of the spill. The US has extended fishing restrictions, a third of the Gulf of Mexico now being off-limits. BP is battling to contain the spill, with robotic submarines working a mile down on the sea bed to cut off the fractured pipe. Yesterday a remotely operated saw became stuck. Analysts at Credit Suisse, the American investment bank, say that up to 72 million gallons may have flowed into the Gulf. That would make the spill seven times worse than the Exxon Valdez spill in 1989.


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