BP assures investors it can cover spill costs

Hayward struck a penitent tone in BP’s first comprehensive update to shareholders since the April 20 rig explosion. He received a warmer response on the call than in many public forums in recent weeks. At least one politician, from Louisiana, has called for BP to fire Hayward.

"We will work tirelessly to rebuild the confidence of the American people, and of the world, in BP,” Hayward said. He was trying to reassure skittish investors who have lost more than $70 billion in the last six weeks, telling them BP would have money left over for a dividend after covering the spill costs.

Hayward noted that hundreds of thousands of shareholders "rely on their investment on BP to their financial security and in many cases their retirement income.”

Major institutional shareholders such as Wellington Management and State Farm Mutual Automobile Insurance Co. declined to comment after the call.

BP Chairman Carl-Henric Svanberg said Hayward has the support of BP’s board of directors. Eleven workers died in the blast and the ruptured well continues to spew 500,000 to 1 million gallons of oil everyday.

Officials wouldn’t discuss BP’s dividend. It is scheduled to make an 84 cents per share payout on June 22. U.S. lawmakers have pressured the company to table plans for future dividends, given the enormous costs associated with the spill.

Svanberg indicated the company would decide on the dividend closer to its next quarterly earnings report on July 27.

Hayward wouldn’t estimate how much the Gulf disaster will eventually cost, though he told analysts that minority partners like Anadarko Petroleum Corp. will be expected to pay as well.

"I have no expectations that they won’t behave as they’re required to,” he said.

There were no overtly hostile questions on the call and no discussion about Hayward’s string of gaffes — one British-based analyst even congratulated him on his handling of the situation.

Hayward said it was fair that he endure the bulk of the criticism. He credited his thick British skin for coping with it.

"Sticks and stones can hurt your bones but words never break them, or whatever the expression is,” he said.

BP faces a tough balancing act, caught between worried investors and an increasingly angry U.S. government and public. It’s a key stock for millions of investors and pension funds. About 40 percent of BP shares are held in the U.S. The stock also accounts for about 6 percent of all the UK equity money held by defined benefit pension schemes.

BP shares dropped amid a sell-off in the energy sector and the broader market. The stock dropped $1.80, more than 4 percent, at $37.47 in afternoon trading in New York.

Standard & Poor’s downgraded BP’s credit rating, saying the spill would cost several billion dollars to clean up. Fitch and Moody’s issued downgrades Thursday.

After several failed attempts to contain the well, BP said Friday that some oil was flowing into its latest containment system, but it’s too early to call it a success. Webcams show that clouds of thick oil continue to leak out.

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Kahn reported from New York.