Cameron tells BP chairman he's 'frustrated' by oil spill crisis - but urges British oil giant to remain strong in face of U.S. backlash



Clegg warns against transatlantic 'tit-for-tat'



Now there's anger in U.S. at Obama's rhetoric

BP chairman holds talks with George Osborne



Now he'll meet Obama at the White House



Dividend could be slashed to appease U.S.



Shares climb back 7.2% on FTSE

Leak could be double previous estimates



More than 150 class action law suits filed

David Cameron today told the BP chairman he was 'frustrated and concerned' about the oil spill crisis after the Government held their first talks with the firm about the disaster.

The Prime Minister told Carl-Henric Svanberg it was in 'everyone's interest' that the British multinational stayed strong and stable during a 'constructive' phone call.

Mr Svanberg met Chancellor George Osborne in Downing Street, where he also spoke to Mr Cameron who is currently on his way back from Afghanistan.



He said afterwards: 'I think we have done everything we can to try to fill the well and we have said we would do everything expected from us in cleaning up the beach, taking care of all the claims and learn from this incident and make deepsea drilling an even safer place.'

Mr Svanberg refused to comment about Barack Obama's attacks on his firm, whether the Prime Minister should be more supportive and on the prospect it could slash its dividend.

The BP board is meeting on Monday to decide whether to suspend or reduce the £10billion handout and the chairman has been summoned to the White House for a showdown on Wednesday.



Today's talks in Downing Street came after Nick Clegg today called for an end to the 'megaphone diplomacy' over the crisis.

Row: David Cameron, in Kabul yesterday, told BP chairman Carl-Henric Svanberg (right) he was 'frustrated and concerned' about the oil spill crisis



Weighing in: Nick Clegg arriving at the Nueva Economia Forum breakfast meeting in Madrid today

Barack Obama has been accused of 'buck passing'

The Deputy Prime Minister weighed into the transatlantic row over the disaster in the Gulf of Mexico which has been sparked by outspoken criticism of the British firm by President Obama.



Mr Clegg insisted 'tit-for-tat' attacks were unhelpful, in an apparent swipe at the U.S. President's comments about the British company.

His intervention came as U.S. politicians and analysts launched a furious backlash against President Obama's 'finger pointing' and warned talking down the firm will damage the economy.



Mr Cameron and the U.S. leader will discuss the oil spill for the first time by phone tomorrow, with the Prime Minister under intense pressure to stick up for British interests.

Mr Clegg's comments, made today at the Nueva Economic Forum in Madrid, have raised the stakes as Britain and the U.S. teeter on the brink of a major diplomatic row.



IS SPILL TWICE AS BIG? The oil slick spewing into the Gulf of Mexico is twice as large as previously thought, according to new figures from the US government. Latest estimates suggest that up to 84million gallons (380 million litres) of crude oil have gushed into the sea in the last few weeks - and that the broken well was leaking 1.4million gallons every day at its peak. Environmentalists seized on the latest figures as proof that BP has been underplaying the scale of the disaster but British engineers insist the claims should be taken with a pinch of salt. The new figures follow an assessment by scientists on behalf of the White House and coordinated by the US Geological Survey. BP had estimated that up to 19,000 barrels a day was leaking from the well before they managed to partially contain the spill at the start of the month.

'The lowest estimate that we're seeing that the scientists think is credible is probably about 20,000 barrels a day, and the highest that we're seeing is probably a little over 40,000,' said Marcia McNutt, director of the US Geological Survey. That means anything from 35million to 84million gallons of oil have already fouled the waters - and that more oil is flowing in an hour than officials once claimed was spilling in an entire day. It is the third time the U.S. government has increased its estimate for the leak but the figures are still provisional, and different teams of scientist have come up with different numbers. A recent estimate from the Woods Hole Oceanographic Institute came up with higher estimates using sonar - estimating between 800,000 to 1.7 million gallons a day. The US Geological Survey said the more credible numbers were lower. It believes a more likely estimate is 52million gallons spilling since the rig exploded in April. Ms McNutt said the most credible range at the moment was between 700,000 and 1.4million gallons a day. By comparison, Exxon Valdez, the previous worst US oil spill, was just about 9 million gallons.

'I'm not going to start intervening in a debate which clearly risks descending into megaphone diplomacy,' the Lib Dem leader said.



'I think everyone is united on both sides of Atlantic - obviously, quite rightly, and understandably within U.S. administration and I'm sure within BP itself - to deal with this problem. It is an ecological catastrophe. It does need to be dealt with.'

He added: 'I don't, frankly, think we will reach a solution to stopping release of oil into the ocean any quicker by allowing this to spiral into a tit for tat political diplomatic spat.

'So I and the whole of the British Government want to play our role, as much as we can, our constructive role, to find a solution to what is a huge environmental disaster.'



Of today's phone call, No10 said: 'The Prime Minister explained that he was frustrated and concerned about the environmental damage caused by the leak but made clear his view that BP is an economically important company in the UK, US and other countries.



'He said that it is in everyone's interests that BP continues to be a financially strong and stable company. Mr Svanberg made clear that BP will continue to do all that it can to stop the oil spill, clean up the damage and meet all legitimate claims for compensation.

'The Prime Minister said that he would raise the issue - and discuss these points - in his call with President Obama tomorrow. Earlier, Chancellor George Osborne and senior officials met with Mr Svanberg in Downing Street to discuss the crisis.'

It came after Mr Cameron caused dismay yesterday by appearing to side with President Obama as another £5billion was wiped off the value of BP shares.



In his first response to the crisis, he failed to back demands from other senior Tories, including London Mayor Boris Johnson, for an end to 'anti-British rhetoric, buck-passing and name-calling' by the U.S.

BP - whose shares climbed back today - is also now considering bowing to the U.S. leader's demand and scrapping its dividend for shareholders. The move would hit millions of pensions in Britain.

Since the accident on April 20, BP - which accounts for £1 in every £7 paid out in dividends to British pension pots - has lost £55billion from its stock market value.

Its problems threaten the wider economy because most British insurance companies, building societies and pension funds have large holdings of the firm's shares.

Shares did rise back today - up 8 per cent on the FTSE following a 12 per cent surge on Wall Street overnight as rumours of a possible takeover took hold.



But experts believe the failure to stem the damage from the spill has left the beleaguered firm vulnerable to a takeover or even 'Chapter 11' bankruptcy in America.



In a sign of the huge anger in the U.S. at the vast environmental damage caused by the spill, a BP petrol station in America was shot at and calls for a boycott of its forecourts are gathering pace.

The company is adamant it can meet the costs of sorting out the spill but there is also the possibility of punishment by the U.S. government and scores of law suits have already been filed.

More than 150 class actions have been lodged against BP by fishermen, businesses and property owners claiming economic losses because of the spill.



Four families of workers killed in the Deepwater Horizon rig explosion on April 20 have also now sued its owner Transocean, BP and other companies involved in its operation.

The cases seek unspecified damages and are pending in federal courts in Houston and New Orleans.



The oil giant is now believed to be ready to sacrifice its dividend as long as the U.S. tones down its relentless attacks.

'We are considering all options on the dividend. But no decision has been made,' Mr Hayward told the Wall Street Journal.

For British investors, particularly pension funds, the move would be a disaster. Last year's dividend was worth around £7billion.



Unperturbed: Sun worshippers catching rays on Orange Beach, Alabama despite the clean-up operation

Rescue: The Discover Enterprise sits over the leak site as it burns off crude in Gulf Shores, Alabama

There was further woe as U.S. experts claimed as many as 40,000 barrels of oil might have been gushing from the leak every day - double some estimates.

They accused BP of a 'fatal miscalculation' in failing to realise the scale of the spill earlier which they believe has undermined efforts to stem the flow.



Ian MacDonald, professor of oceanography at Florida State University, said it had meant 'this crisis has continued for much longer with much greater release of oil than would have been necessary had they made much more accurate flow rates at the very start.'

Mr Cameron, speaking in Kabul yesterday where he is visiting British troops, conspicuously failed to express his explicit support for the crisis-torn firm.



'I completely understand the U.S. government's frustration because it's catastrophic for the environment,' the Prime Minister declared.



Hours later, Chancellor George Osborne attempted to calm the row by insisting Mr Cameron was well aware of the 'economic value BP brings to people in Britain and America'.

Downing Street said the Prime Minister would speak to President Obama about the disaster for the first time this weekend. The pair have not spoken formally since the day the Tory PM entered No10.

Until now, the Government has attempted to keep its distance from the row caused by the massive oil leak following an explosion on a platform in the Gulf of Mexico.

But amid growing warnings from business leaders and MPs that the White House's rhetoric is fuelling a collapse in confidence in the company's future, Mr Cameron has now been dragged to the heart of the affair.

Asked if he intended to raise the issue with President Obama, he said: 'I'm sure BP and what's happened on the Gulf coast will be something we will discuss.

'I completely understand the U.S. government's frustration because it's an environmental catastrophe. The most important thing is to mitigate the effects of the leak and get to the root of the problem.

President Obama's vituperative remarks about BP - and his administration's insistence on calling it 'British Petroleum', a name it ditched a decade ago - have now sparked anger on his own shores as well as in the UK.

He has said he is looking for 'ass to kick' at BP, and that he would have sacked the firm's chief executive Mr Hayward.



Phil Flynn, an analyst at PFGBest Research in Chicago, likened President Obama to the sharp-tongued Russian prime minister.

'I feel like I'm listening to Vladimir Putin. I think the advice to act angry and lash out at BP may make some people feel better, but it's sending the wrong message to our trading partners across the globe,' he said.



And Professor Michael Bailey from Georgetown University cautioned against going too far.

'If it were to get to such an extreme where BP would have to close up shop ... obviously that would be catastrophic,' he said.



David Gergen, a former adviser to Republican and Democratic presidents, said: 'As understandable as it has been to lash out, the wiser course would appear to be standing shoulder to shoulder with BP to get the problem fixed and save the finger-pointing ... until after the hole is plugged.'



Republican Mitt Romney, who could run for the presidency in 2012, wrote in USA Today: 'We have become accustomed to his management style -- target a scapegoat, assign blame and go on the attack. But what may make good politics does not make good leadership. And when a crisis is upon us, America wants a leader, not a politician.'



White House spokesman Robert Gibbs insisted: 'I think the criticism that somehow we've been too harsh - I don't think that matches up with the reality or the rhetoric that we've used.

'Our focus has not been on anything other than ensuring that the responsibilities of those responsible for this disaster -- that they keep those commitments.'

Threat to wildlife: A brown pelican flies over oil-soaked containment booms in Louisiana

Lord [Digby] Jones, the former trade minister, said Mr Cameron should 'take the argument back to America'. 'I would expect him to stand up more for a British company,' he said.

'I would look to hear David Cameron say: "You've got some other people to shoulder the blame here, and they happen to be Americans".



'Obama is saying to himself: "How can I distance myself from this problem?" His answer is to throw BP to the wolves.'



He kept up the pressure today, insisting that Mr Cameron should be a 'bit more forceful'.



'America has previous on being a little bit protectionist, making sure that a company takes the rap. I don't want BP falling foul of domestic pork barrel politics with mid-term elections coming up,' he told the BBC.

'It was an American company that built this [rig], it was an American company that operated it, it's an American regulator that told these people not to go shallow but go out deep where the technology is at the borders of what we can do. It's the American population that take(s) the black stuff and turns it into their gas guzzlers.'

Tory MP Richard Ottaway, chairman of the Foreign Affairs Select Committee, added: 'We have to keep diplomatic channels open, and I'm sure they are. What this means is calm and mature consideration rather than banging drums in public. David Cameron is quite capable of standing up to BP in private - but I think it should stay in private rather than escalate the war over the airwaves.'



John Napier, chairman of Royal Sun Alliance - one of the City's biggest insurers - last night published an open letter to President Obama accusing him of being grossly unfair.

In a brutal attack, Mr Napier said: 'There is a sense here that these attacks are being made because BP is British.' It goes on to accuse Mr Obama of 'double standards', who should be reminded of the damage which American banks have wreaked on the global financial system.

And London Mayor Boris Johnson said: 'I would like to see a bit of cool heads rather than endlessly buck-passing and name-calling.'

Pensions Minister Lord Freud has suggested UK pension funds may be to blame for investing too heavily in one company.



In a House of Lords debate, Lord Freud said that of all the dividends paid last year by FTSE 100 companies, BP was responsible for around 14 per cent.



He said: 'This raises the question...To what extent are pension funds acting responsibly with regard to their ownership responsibilities to companies?'



Stop the anti-British bias, say City chiefs

By Becky Barrow and Karl West

One of the biggest names in business yesterday led a City backlash against President Obama's critical treatment of BP.

The intervention came from John Napier, chairman of one of the country's biggest insurers Royal Sun Alliance.

He was backed up by former trade minister Lord Jones who insisted: 'Obama is saying to himself "How can I distance myself from this problem?". His answer is to throw BP to the wolves.'

Yesterday Mr Napier, 67, published an open letter to Barack Obama accusing the President of being grossly unfair in his approach to the embattled oil company.

He wrote: 'There is a sense here these attacks are being made because BP is British.'

The letter goes on to accused Mr Obama of 'double standards' after the damage which American banks caused on the global financial system. Mr Napier also accuses Obama of being 'somewhat prejudicial and personal' towards BP's boss Tony Hayward.

He writes: 'The immediate issues are very challenging but are best solved together in a more statesmanlike way. The leak may take time to fix, and it will be, but Afghanistan and Iraq will take much longer.

'We can all agree that the first and absolute priority is to stem the leak. Perhaps the second one is to ensure the reputation of the Presidency outside the U.S.A is seen as objective, balanced, able and capable of taking the heat when under pressure.

'We liked the Obama we saw at your election. Can we have more of it, please?'

Last night, RSA insisted Mr Napier's comments were made in a personal capacity.



But asked on Sky News why he had 'taken a pop' at President Obama, Mr Napier said: 'Have I had a pop at him? Not at all. I've just put on record my concerns about the tone that has developed, particularly about the personalisation of issues which is alien to us and our culture and the fact that it's being received over here as an anti British rhetoric.'

He added: 'That may not be his intent but that's how it's reading and you don't have to take my word for that, you have only got to read the press around me and there are dangers in that and I think there are concerns and therefore I'm raising those concerns legitimately and moderately.'

Mr Napier went on to say his letter had been 'moderate' and 'supportive' and was also giving the President 'good feedback'.

When asked whether his views were shared in the City, Mr Napier added: 'This is not an RSA view, this is my personal view and as a person who is very interested in the interplay between business and politics therefore I have expressed these concerns. A source close to Mr Napier said he is an 'admirer and supporter' of President Obama, but that he had grown tired of pot-shots at BP because it is a British company.

The source added: 'John feels the comments have turned prejudicial because BP is a British company and that is not the new politics promised by Obama and it is not helpful.

'The language has gone from being critical of the leak to going a step beyond.'

David Buik, from broker BGC Partners, said: 'I just think invective and hysterical rhetoric from the world's leading statesman is very counterproductive when dealing with a serious commercial problem which does not require political input.

'The fact remains the U.S. government needs to satisfy itself that BP has the financial resources to meet its obligations - and apart from that BP should be left alone.'



























