BP to suspend dividend payments

LONDON, June 11 (UPI) -- British petroleum giant BP is placing $2.4 billion in an escrow account to cover liabilities in the Gulf of Mexico, sources told The Times of London.

The funds would come from a suspension of second-quarter dividend payments, which would continue until the company can get a clear assessment on the costs of the Deepwater Horizon oil spill in the gulf, which began April 20 with a deadly oil rig explosion and has become the largest oil spill disaster in U.S. history.

"We are considering all options on the dividend. But no decision has been made," Chief Executive Officer Tony Hayward said.

However, sources said the company plans to announce a suspension of second-quarter dividends July 27 and further dividend suspensions are possible.

For Britain, the impact of BP's plan would be an enormous blow to pension funds. One of every six dividend dollars paid to pension funds in Britain, about $10.2 billion a year, comes from BP profits, the newspaper said.

In part, the plan is meant to convince the public BP has the resources to deal with disaster. Wary investors have fled BP. Its share values have dropped to 14-year lows.

Since April, BP has lost more than a third of its market value, The Times said.