Angry British shareholders of oil giant BP urged the company Thursday to be more forceful in its legal fight against tens of billions of dollars in claims still being asserted by the U.S. government and several Gulf states affected by the 2010 oil spill. One suggested BP boycott Walt Disney World in Florida to get Americans “to come to their senses.”
BP executives seemed to endorse the concerns, though they were careful not to wade too much into the debate, nor specify any actions they may take, because of the ongoing civil trial in federal court in New Orleans over the disaster.
“I can only assure you this board is being robust and we have been clear all the way, both during negotiations and publicly, we are willing to settle on reasonable terms, and if we don’t, we continue to fight this in the legal system,” BP Chairman Carl-Henric Svanberg said at the company’s annual meeting in London.
He told the shareholders “your worries are on everybody’s mind.”
One shareholder described the claims as “extortionate,” and said BP needs to do more to help the company move beyond the uncertainties still hanging over it. Another shareholder claimed there is no more evidence of pollution in the Gulf nearly three years after the disaster, and he alleged the crisis was “vastly blown up” by the U.S. media. Another shareholder suggested the amount of money BP has already paid out exceeds the actual damage caused by the spill.
BP, at times, allowed the comments to go longer than allowed under the meeting’s rules. There was loud clapping by the audience.
In Washington, a spokesman for the Justice Department declined to comment on the statements made by BP shareholders.
Several Gulf residents who were at the meeting and allowed to speak as proxies for BP shareholders defended the claims, and accused BP of not doing enough to restore the Gulf and compensate workers who cleaned up the spill and suffered illnesses from breathing in fumes from the oil and the dispersants used to mitigate the damage.
“This company still looks, feels and smells like Tony Hayward’s BP,” a woman who identified herself as the wife of a Gulf worker told the executives
Hayward was ousted as the CEO of BP months after the oil spill. He was replaced by American Bob Dudley, who has roots in Mississippi.
Meanwhile, the British oil giant is targeting 45 major projects between now and the end of the decade as it seeks to create big returns for shareholders, but it must also navigate through legal landmines, such as the oil spill trial, executives said.
With everything the company has on its plate, BP isn’t planning any big purchases to grow the company.
“An acquisition right now would be a big distraction,” Dudley said. He didn’t hint whether BP would be willing to sell the company.
Dudley and Svanberg said despite all the progress BP has made to turn the corner following the Gulf disaster, there are still uncertainties, the trial biggest among them.
“We have faith in the U.S. justice system to deliver a fair outcome,” Dudley said in an address carried on the Internet.
His comments further suggested that a settlement involving BP that would cut short the federal trial in New Orleans, now in its seventh week, is unlikely in the immediate future.
“We do not believe we acted with gross negligence,” Dudley said.
BP trial: Executive says safety was top priority
He said the company is making safety a top priority. He said four employees were killed in workplace accidents in 2012. That was before the terrorist attack in January at a natural gas facility in Algeria. Four BP employees were among the people killed in the attack.
On the business front, Svanberg said BP is a smaller, nimbler company following the sale of $38 billion in assets and its 50 percent share in TNK-BP. He said the sales were necessary to preserve the company’s financial position and ultimately return value for shareholders.
“It also means we have a company that is simpler to run,” Svanberg said.
He said BP still has work to be done. He said BP wants to be “one of the world’s most admired and trusted companies.”
“BP has never been afraid of change, and we are changing again,” Svanberg said. “We are stronger, we are safer, we are a company that is ready to create value for you.”
Among the items on the agenda at the meeting was a proposal to authorize the company to buy back a certain amount of shares, and with that authority the company intends to initiate a previously announced $8 billion share buyback program that was disclosed after the TNK-BP stake sale to Russian oil firm Rosneft. The official vote tally had not been posted late Thursday, but the resolution was expected to pass.
Some shareholders questioned the wisdom of the buyback at a time when the company’s share price continues to have difficulty gaining traction.
Svanberg responded that BP believes its balance sheet is in good shape.
“We are buying at a time we still think there is pressure on the share price,” he said.
Svanberg said share prices are difficult to judge, but BP believes it is making a good decision with the buyback.
“We have to remember while we are in a process of restructuring and reorganizing the company, the company has a clear way forward and we think we have conveyed that to the market in a clear way,” the BP chairman said. “We are still in the middle of the civil trial, which creates a little uncertainty.”
He said the path to increasing the share price is in part “a matter of getting through the minestorms and prove we can deliver on what we’ve said.”
Read ongoing FuelFix coverage of the legal trials surrounding the Gulf of Mexico oil spill:
- Attorney fee disputes in Gulf spill get own judge (April 8)
- BP launches defense in Gulf spill trial (April 8)
- Judge rejects BP request to block payment on some Gulf spill claims(April 5)
- Texas lawyer used forged signature in Gulf spill case, judge rules(April 5)
- Judge frees Cameron from liability in Gulf spill trial (April 3)