BP shares slip ahead of White House meeting

[June 16, 2010]  LONDON (AP) -- Shares in BP PLC slipped in London trading Wednesday ahead of what promises to be a tense meeting between the oil company's chairman and President Barack Obama in Washington.

Obama has vowed to make BP pay for all of the damage caused by its leaking well in the Gulf of Mexico, and has demanded that the company set up an independently controlled fund to assure that it will pay.

"I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company's recklessness," Obama said in an address from the White House on Tuesday.

That idea had been kicking around for a while, and Obama's statement didn't rattle the markets.

BP shares were down just 0.5 percent at 340.25 pence ($5.03) on the London Stock Exchange after briefly trading higher. They had traded at about 655 pence before the April 20 explosion which killed 11 workers on the drilling rig.

Obama has invited BP Chairman Carl-Henric Svanberg, who has kept a very low profile since the leak erupted eight weeks ago, to the White House meeting.

BP said Wednesday that Group Chief Executive Tony Hayward, BP America President Lamar McKay and Managing Director Robert Dudley would accompany Svanberg.

The company had said Tuesday that it shares Obama's goal of "shutting off the well as quickly as possible, cleaning up the oil and mitigating the impact on the people and environment of the Gulf Coast. We look forward to meeting with President Obama tomorrow for a constructive discussion about how to best achieve these mutual goals."

Obama has come under pressure for his response to the crisis.

An Associated Press-GfK poll released Tuesday found 52 percent of those surveyed don't approve of Obama's handling of the spill, but 83 percent disapprove of BP's performance.

BP said Tuesday it had approved initial payments on 90 percent of commercial large loss claims filed so far. The 337 checks totaled $16 million for businesses that had filed claims of more than $5,000, BP said.

The company added that it has issued approximately 25,000 checks totaling $63 million to cover small and large claims, and expects the total to rise to $85 million by the end of the week.

BP, which earned a profit of $6.1 billion in the first three months of this year, says it has spent in excess of $1.4 billion so far in attempts to stop the flow of oil billowing up from the seabed.

On June 3, the company announced it had set up a $360 million escrow account to pay for the construction of six sections of Louisiana barrier islands approved by the U.S. government.

Gordon Gray and James Evans, analysts at Collins Stewart in London, on Wednesday downgraded their target price for BP shares from 575 pence to 450 pence. They added that they believe BP will bow to U.S. pressure to suspend dividends.

"We think the balance of probability points to BP's shares offering good value at current levels. However, we think the risks of investing remain high and view BP as an investment for the risk-tolerant and the long-term at present," they said in a research note.

The analysts say they believe the pressure on the shares is due to a sell-off by U.S. institutions "unwilling to be seen to be maintaining big positions in the stock, particularly ahead of end-June quarter reporting to investors."

[Associated Press; By ROBERT BARR]

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