WASHINGTON (AP) -- The chairman of BP's board said Wednesday that the oil company will suspend its quarterly dividend as part of its commitments to compensate victims of the Gulf oil spill.
BP Chairman Carl-Henric Svanberg made the announcement Wednesday after emerging from the White House where he and other BP executives met for four hours with President Barack Obama. BP shares jumped as Svanberg spoke and were up 3.6 to $32.53 in afternoon trading in New York.
BP said in a statement that it has canceled a dividend payment - totaling about $2.6 billion - scheduled for June 21 and that it won't declare a dividend for the second and third quarters.
Svanberg also confirmed that the British oil giant has agreed to set aside an initial $20 billion to pay the victims of the oil spill in the Gulf of Mexico.
Obama and key members of Congress in recent weeks have pressed BP to suspend the dividend payment and give assurances that the company will meet its commitments to Gulf coast residents and businesses economically harmed by the spill.
BP said it will consider resuming dividend payments in 2011 when it issues results for the fourth quarter of this year.
