June 4, 2010 / 8:15 PM / 7 years ago

Obama lashes out at BP over dividend

GRAND ISLE, Louisiana (Reuters) - U.S. President Barack Obama warned energy giant BP on Friday not to “nickel and dime” Gulf coast residents over oil spill damage claims while paying out billions of dollars in dividends to shareholders.

<p>U.S. President Barack Obama eats a locally-caught shrimp with David Camardelles (R) and convenience store owner Patti Gaspard during a meeting with locals in Grand Isle, Louisiana, June 4, 2010. REUTERS/Jason Reed</p>

“My understanding is that BP has contracted for $50 million (34.5 million pound) worth of TV advertising to manage their image during the course of this disaster,” Obama said. “In addition, there are reports that BP will be paying $10.5 billion -- that’s billion with a ”B“ -- in dividend payments this quarter.”

BP on Friday resisted pressure from some U.S. lawmakers to stop dividend payouts until the full cost of cleaning up the spill is known.

The company is due to announce its second-quarter dividend and results on July 27. The $10.5 billion figure quoted by Obama covers dividend payments for the whole year and not just for this quarter as he said.

Obama was speaking on his third trip in a month to the oil-stained Louisiana coast. The six-week-old spill, the biggest in U.S. history, has caused environmental devastation and threatens the future of a multibillion-dollar fishing industry.

Obama said it was too early to say whether BP’s latest attempt to control the spill, placing a containment cap over a gushing deep-sea oil well, would be successful, but it appeared to be working so far.

The president has vowed to hold BP accountable for the disaster, saying it must pay the costs of capping the well and dealing with the massive oil spill.

“I don’t have a problem with BP fulfilling its legal obligations, but I want BP to be very clear they’ve got moral and legal obligations here in the Gulf for the damage that has been done,” he said.

“And what I don’t want to hear is, when they’re spending that kind of money on their shareholders and spending that kind of money on TV advertising, that they’re nickel and diming fishermen or small businesses here in the Gulf.”


Obama, who has been criticized for not showing enough emotion about the devastation hitting the Gulf region, raised his voice when talking about the London-based oil company.

Obama spoke to reporters after meeting local officials, state governors and administration officials involved in overseeing the response to the spill.

Officials at the meeting told Obama that Gulf residents and businesses were having trouble getting claims paid by BP.

Some local fishermen and boat operators have also complained that the economic hardship payments paid by BP, ranging up to $5,000 a person, have been insufficient to make ends meet.

The company said on Friday it would be paying a second month of loss-of-income claims to compensate for income and profit disruptions.

BP, which says the spill has cost it about $1 billion so far, put off a decision on Friday on whether to suspend paying its next quarterly dividend. Most analysts believe the company can foot the bill without cutting its dividend.

Obama has repeatedly lambasted BP over the spill, which has confronted him with one of the biggest challenges of his presidency. The White House announced early on Friday that Obama was postponing a June 13-19 trip to Indonesia and Australia so he could focus on the oil spill.

There is growing public criticism of his administration’s handling of the disaster. More than 60 percent of Americans believe both Obama and BP are not doing enough to clean up the spill, according to a CBS News poll released on Friday.

As Obama’s motorcade drove towards the coastal town of Grand Isle, a group of people stood in front of a house holding a cardboard sign that said: “Help us now.”

In Grand Isle, Obama met with local residents who had been affected by the spill.

The president, who was criticized for not meeting “real people” during his last visit to the region, peeled and ate shrimp while visiting with the local mayor, fishermen, a marina owner and a convenience store owner.

Writing by Jeff Mason and Ross Colvin; Editing by Peter Cooney

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