Business

BP creates $20 billion fund for oil spill costs
by Magdalena Rosova

BP's executives met with American President Barack Obama and agreeded to create a fund that should cover costs from the oil spill in the Gulf of Mexico. BP will put $20 billion dollars into the fund. To pay the costs from the oil spill the company needed to freeze payments to its shareholders and Wednesday it has also announced its plans to offload billions of dollars in assets. The executives have decided for a series of belt-tightening measures, which should save about 17 billion dollars this year. BP chairman Carl-Henric Svanberg promised that the company would fulfill all of its responsibilities and would definitely not go under. For the rest of the year, payments for B! P's shareholders will stay frozen. This way Svanberg is planning to save seven billion dollars. Svanberg's decision invoked anger of public. But BP does not have other option, US lawmakers forced the company to cover the costs of the spill first and just then to reward its shareholders. Therefore Svanberg apologized for the spill and officially announced that the company would not pay any further dividends that year. BP will also probably offload 10 billion dollars of its assets to pay the costs. No one knows what is the real cost of the spill as the crisis is not over yet and oil is still flowing into the sea. Therefore BP is thinking of possible ways to save money, but it is definitely not planning to sell its core assets. By the end of the year BP have to pay 5 billion dollars into the fund and for the next three years it will pay a billion dollars each quarter.

related story (sgx17613): http://www.msnbc.msn.com/id/37736098/n! s/busine ss-us_business...

by Magdalena Rosova for Cantell TV (http://cantell.tv)

Cantell TV is the fastest growing provider of digital broadcasting coupled with telecommunications, allowing people to easily control, view, upload and share digital content through proprietary interface coupled with free phone calls. Cantell TV is committed to delivering infinite choices to your world of entertainment at the tip of your fingers.

posted by Blog TechSource @ 1:52 PM