BP directors will meet on Monday to discuss whether to suspend dividends to shareholders, the BBC has learned.
BBC News - BP board to discuss dividends on MondayExecutives will then meet with US President Barack Obama on Wednesday, but no announcement on the payments is expected in the near future.
BP has been under intense pressure from the US government, which wants BP to use the money to pay for the Gulf of Mexico clean-up.
Meanwhile, BP's shares closed up 7.2%, recovering losses suffered on Thursday.
"No announcement is expected for a while, but it is looking more likely that BP will cease paying the £1.8bn of dividends per quarter that it's been delivering to shareholders - until that is it can quantify the final massive bill for the Gulf of Mexico oil debacle and prove to the White House that it can afford those enormous costs," BBC business editor Robert Peston said.
I'm not understanding this move. Won't withholding dividends encourage even more short selling on BP and decrease investor confidence even more?
Unless the goal is to sink BP, I don't understand why this is necessary. BP has plenty of assets to handle this crisis, it just needs the understanding of how exactly to plug the hole.
Somehow I feel this suggestion is being floated around by politicians in a dire attempt to grasp at political straws. "Look! We're doing something! We're punishing BP!"