The BP oil spill is lining the pockets of Google, Bing and Yahoo as the British company fights to control information about the disaster. Type “oil spill” in those search engines and BP appears at the top of the page. BP is investing in the search engine companies as the plummeting BP stock price threatens the future of a company with billions in cash. Politicians frustrated with the BP claims process are adding to the pressure, demanding that the company pay damages instead of dividends. Washington also gave BP until Friday to submit cleanup contingency plans from BP in the event of hurricanes. Meanwhile, the oil spill in the Gulf of Mexico 2010 added up to as much as 125 million gallons and counting on day 52 of the disaster.
BP oil spill search scheme
BP is aggressively going after web users looking for a BP oil spill update. USA Today reports that BP, which has been criticized for spinning and withholding information about the disaster, is paying search engine companies Google, Bing and Yahoo to show up as the top sponsored ad for search queries such as “BP news,” “oil spill” and “oil spill claims.” The sponsored links take you to a special BP Web page featuring the news updates, photos and videos telling a story about the oil spill disaster and cleanup that BP wants people to hear. What’s missing from the BP site is the oil spill live feed that shows a raging gusher of crude overwhelming the oil spill cap.
BP stock price plummets
So far BP’s oil spill ploy with the search engine companies hasn’t helped its stock price. BP stock slumped to its lowest price in more than seven years in London trading, driven by U.S. political pressure over its failure to halt the oil spill in the gulf of Mexico 2010. Investors in Britain, where BP stock is widely held by pension funds, are furious over suggestions by U.S. politicians that BP should not pay a dividend until it cleaned up the oil spill. The Associated Press reports that when asked if BP should cut its dividends to shareholders House Speaker Nancy Pelosi said, “I think it’s appropriate for BP to be paying businesses in the Gulf. … They have a responsibility under the law to pay these damages. They made $17 billion last year. Maybe people who receive dividends have deeper pockets.”
BP oil spill cleanup costs, political pressure
The BP stock price has fallen 44 percent in London trading since April 20, the day of the Deepwater Horizon rig explosion that killed 11 workers and triggered the oil spill in the Gulf of Mexico 2010. BusinessWeek reports that BP’s market capitalization has lost more than $73 billion since the accident. BP bonds and credit-default swaps are trading as if the oil company has lost its investment-grade rating as cleanup costs and political pressures mount from the spill. But BP stock was 11.9 percent higher Thursday in New York trading after falling 15.8 percent on Wednesday after U.S. politicians demanded that BP suspend its dividend payments and advertising campaigns to pay for the oil spill cleanup.
BP claims process under fire
The BP claims process is another source of bad PR as the oil spill in the Gulf of Mexico 2010 spreads its environmental and economic devastation. BP promised the Obama administration Thursday that it would speed up its payment of claims to businesses affected by the disaster. CNN reports that BP agreed to look at upcoming expenses of a business filing a claim rather than a company’s expenses for a previous month. A spokesperson from the Federal Emergency Management Agency said that BP recognized its previous approach of waiting until after the books have closed for each month to calculate losses won’t get dollars out quickly enough for the businesses that are sidelined.
Oil prices: BP earnings keep pouring in
The BP stock price free-fall is a disconnect with the companies financial situation. BP earnings totaled more than $16 billion last year. In the first quarter of 2010 its profit more than doubled to $6.08 billion from $2.56 billion a year earlier thanks to higher oil prices. The New York Times reports that BP has said it would decide next month whether to keep the quarterly dividend at 14 cents a share for the second quarter. Last year, the company paid about $10.5 billion in dividends. BP’s cost for the response to the oil spill has reached about $1.43 billion. BP earnings will continue to pour in. The company told investors last week that it had $5 billion cash on hand and that it was generating “significant additional cash flow” as the oil prices remain above $60 a barrel.