London – On Friday, the BP CEO Mr. Tony Hayward tried reassuring the investors and the share holders on the fallout of the oil spill, expressing that the company has enough “firepower” to deal with the “severe” costs for the clean up.

This was the first ever penitent note by the CEO of the company along with the BP PLC executives in their first comprehensive update to the investors since the Deepwater Horizon rig almost 2 months back. This was mainly aimed to regain the marred reputation of the company, to restore the damaged Gulf coast and of course to stress on the safety measures that the company has charted down.

Even though the shares of the BP that were sold off had removed some $70 billion off the company value, the BP’s Chairman Carl-Henric Svanberg has promised to meet all the obligations both as a responsible company and also in rebuilding the reputation of the BP as a long term member of the business communities not only in US but all around the globe.

The morning trading in NYSE saw the stocks getting lowered at around $37.78 i.e. by 3.8% on the stock market. Being the key stock for millions of share holders, and pension fund savers, BP accounts to about 6% of all the UK equity money held by the defined benefit pension schemes, and the company’s share price also has a major hold on the wider FTSE 100 Index accounting to about 7% of the index.

Mr. Hayward added that the company expects the containment and the clean up costs to go on with current rates as they have already topped $1 billion pounds since the rig explosion in April. So, if the company overcomes that by the month of August, then BP hopes to pay the majority of the costs by this year end exclusive of the costs for potential lawsuits and fines, he said.

However, he tried highlighting the company’s strong balance sheet, saying that BP continues to produce good cash inflows from other services.

Having earned $16 billion in the year 2009, BP has a good annual dividend yield of about 8.9%; Mr. Svanberg indicated that the company would come to the decision on the dividend closer to its next quarterly earnings report in July when it is the time to declare the next shareholder dividend. He also added that all the decisions will be taken in the long term interests of the investors while considering all the major factors in the process, but in the mean time, the priority of the company lies in the control of the oil spill.

[Source – AP]