Shares in BP PLC
plunged again on Monday as the company's board discussed U.S. demands that it suspend dividend payments until it pays for the cleanup of the Gulf of Mexico oil spill.
Those costs have risen to $1.6 billion, the company announced in a news release Monday
That figure includes the spill response, containment efforts (including initial funds for building barrier islands off the Louisiana coast), the drilling of relief wells, grants to Gulf States, claims paid and federal costs.
It does not include future costs associated with the scores of lawsuits that have already been filed.
Earlier this month Credit Suisse estimated the total costs for cleanup and damages could be as high as $37 billion.Special Section: Disaster in the Gulf
In London BP shares were down by 8 percent at 360.2 pence ($5.31) by midafternoon on the London Stock Exchange, after recovering some ground on Friday.
In New York shares of the oil company fell $2.38, or 7 percent, to $31.58 in trading Monday morning.
BP stock has been especially volatile over the past week. The stock dropped to a 14-year low on Wednesday, only to rebound on Thursday and Friday.
The company has lost about $90 billion in value since the spill in the Gulf nearly two months ago.
The BP board's London meeting comes as U.S. President Barack Obama begins a two-day visit to the Gulf Coast to view the damage from the massive slick and talk to affected residents. The Obama admininstration has criticized BP for any payment of dividends (which run approximately $10 billion annually) until the spill has been contained and cleaned up.
BP has a number of options regarding dividend payments (analysts believe the company is unlikely to scrap it altogether). Dividends could be deferred, paid in the form of shares, or put into an account for payment after BP had paid all its cleanup costs.Under Political Fire, BP May Cut or Suspend Dividend
Any decision was not expected to be announced immediately, with BP executives due to meet Mr. Obama in Washington on Wednesday.
"The call from the U.S. administration for a third party-administered fund to meet the claims of victims of the spill appears to be an attempt to show the U.S. public that the government is 'doing something,'" said Jonathan Jackson, head of equities at London-based Killik & Co.
"As a political compromise, we would expect BP to agree to this request."