The runaway oil well fouling the Gulf of Mexico has cost BP more than $72 billion — and could cost its baby-faced chief his job.
Geologist-turned CEO Tony Hayward, who turned 53 last week, is expected to face blistering shareholder demands today for his ouster due to the crisis at the company’s wrecked Horizon Deepwater rig off Louisiana during a shareholder conference call.
Hayward hopes a shaky siphon hookup on the ocean floor will curb the tens of thousands of barrels of crude pouring out daily. BP has already paid out more than $1 billion on clean-up costs in the six-week disaster, and could face another $6 billion outlay this year alone.
Some shareholders were gunning for Hayward because more than $70 billion has been wiped from the stock’s value since the disaster erupted on April 20 with an explosion that killed 11. Its shares have risen the last two trading days — closing yesterday at $39.25, up $1.59.
Shareholders will also be angered by the effort of Sen. Chuck Schumer (D-NY), who with other lawmakers, is demanding that BP cancel the $10 billion in dividends scheduled to be paid out this year.
“We believe BP will bow to political pressure in the US and suspend dividend payments for the remainder of 2010,” said a research note from London-based investment bank Evolution Securities.
As BP’s uncertain siphon effort took shape, more bad news came out of Washington as others members of Congress said they would introduce legislation to repeal a 1990 law capping an economic liability claim from an oil spill at $75 million. Some members want a new cap set at an eye-popping $10 billion, which could ruin BP.
Ratings agencies Moody’s and Fitch Ratings downgraded BP’s credit ratings and said they might cut them further on rising concerns about clean-up and legal costs.