Obama and Cameron to discuss oil spill

The Gulf oil spill is raising tensions on both sides of the Atlantic, with a "British" company being portrayed as the villain.

US President Barack Obama and British Prime Minister David Cameron plan to discuss the environmental catastrophe by telephone today, hoping to ease what has become a growing rift between the two countries over the criticism of the well's owner, BP.

As BP struggled unsuccessfully to halt the gushing oil which is bringing environmental chaos to the Gulf Coast, Mr Obama sharpened his criticism of the energy giant.

He said he would have fired BP's top executive if he were in charge, embraced the idea that the oil giant suspend its quarterly dividend and reproached BP for spending money on a public relations campaign.

And occasionally he referred to "British Petroleum" although the company years ago began using only its initials and, in fact, is a far-reaching international corporation with extensive holdings in the United States, including a Texas refinery and a share of the Alaska oil pipeline.

The sharp rhetoric from Washington, aimed at addressing the concerns of angry Americans, especially those in the Gulf Coast region, has produced a backlash in Britain, where BP is viewed as one of the country's corporate pillars.

Millions of retired Britons depend on BP dividends since pension funds are heavily invested in the oil company, the world's third-largest.

Mr Cameron has tried to find a middle ground. He has said he shares with Americans the "frustration" about not being able to halt the spill and concern about the environmental damage caused by the thousands of barrels of oil gushing from the BP well.

But he also views BP "as an economically important company" not only in the United Kingdom but also the United States and other countries, according to his office.

"It is in everyone's interests that BP continues to be a financially strong and stable company," he said.

In London, UK Chancellor George Osborne said yesterday, after meeting top BP executives, that the British Government understands US concerns about the spill but "the Prime Minister is also clear that we need constructive solutions and that we remember the economic value BP brings to people in Britain and America".

BP's stock value has dropped by some 40% since the April 20 Gulf oil rig fire which unleashed the country's worst oil spill. But shares have rebounded somewhat in recent days. They shares rose $1.19 dollars, or 3.6%, to close at $33.97 in New York yesterday.

The company's board is expected to meet on Monday to discuss deferring its second-quarter dividend and putting the money into escrow until the company's liabilities from the spill are known.

"So far, no decision has been taken," BP spokesman Robert Wine said yesterday.

BP chairman Carl-Henric Svanberg, who has faced criticism for not being more visible in BP's response to the Gulf spill, is scheduled to meet Mr Obama at the White House on Wednesday and is likely to be accompanied by chief executive Tony Hayward and other BP executives. It will be the first time Mr Obama has met BP officials since the crisis began.

Mr Hayward, who has been a target of criticism because of a number of ill-advised comments he has made, will also be the key witness at a House hearing on Thursday where he is likely to be closely questioned about BP's clean-up efforts and its commitment to people and businesses who have been economically harmed by the spill.

Members of Congress, both Republicans and Democrats, have been sharply critical of BP, which owns the well that exploded, unleashing the massive spill. House Speaker Nancy Pelosi, a Democrat, is among a number of politicians who have called on BP to suspend its dividend payments.

The chief executive of Britain's National Association of Pension Funds said yesterday that investors might be receptive to a dividend suspension to protect the company's long-term economic future.

Whatever that future will be, for the time being BP remains the number one environmental villain in the eyes of many Americans - and that is unlikely to change until the flow of oil from its damaged well is stopped.