UPDATE 3-BP resists div cut pressure; plans Q2 charge

* BP says understands importance of dividend

* To take charges for “a long period of time”

* Shares up 0.8 percent

(Recasts, adds date of Q2 results and dividend, analyst
quote)

By Sarah Young and Kate Holton

LONDON, June 4 (BestGrowthStock) – British oil company BP Plc (BP.L: )
resisted political pressure to stop dividend payouts on Friday
as oil continued to spill from one of its wells into the Gulf of
Mexico.

“We fully understand the importance of our dividend to our
shareholders,” BP said in a statement as efforts continued to
contain the crude leak from one of its deepwater operations.

“Future decisions on the quarterly dividend will be made by
the board, as they always have been, on the basis of the
circumstances at the time.” .

BP is due to announce its second quarter dividend and
results on July 27.

BP is under political pressure to suspend dividend payments
— which total $10.5 billion a year — after two U.S. Senators
called on it not to pay out to shareholders until the full costs
for cleaning up the massive spill are known.

Most analysts believe the company can foot the bill without
cutting its dividend, and some saw Friday’s statement as a
reassurance on that front.

“My take on the underlying message is that the dividend is
safe given the strong cash flow and gearing headroom,” said Alan
Sinclair of Seymour Pierce in London.
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Analyst forecasts for the total cost of the spill range from
$5.3 billion, an estimate from Dutch bank ING should the current
effort to plug the well work, to $37 billion from investment
bank Credit Suisse. BP generated cash of $7.7 billion in the
first quarter.

At 1450 GMT, BP shares stood 0.8 percent higher at 436
pence, off their highs of the day but supported by news that a
cap had been placed over the leaking well and was funnelling oil
to the surface.

BP hopes its latest attempt to control the spill, placing a
containment cap over a hole on the ruptured wellhead, will stop
oil spewing from the deep-sea well, where an explosion on April
20 has caused the biggest oil spill in U.S. history.

The company refused to estimate the total cost of the
operation, cleanup and compensation costs, but said a provision
would be made in second quarter results and it would be taking
charges for the spill for “a long period of time”.

“STRONG COMPANY”

BP has lost around a third of its market value or 40 billion
pounds ($59 billion) in the last six weeks. The company has also
suffered downgrades to its debt rating but Chief Executive Tony
Hayward dismissed suggestions its premium status was under
threat.

“The financial consequences of this incident will
undoubtedly be severe, but BP is a strong company and we have
weathered many storms before,” Hayward said.
“I’ve talked on several occasions about the strength of the
underlying cash flow of the group,” he said. “We’ve tried to
maintain a conservative balance sheet. It’s certainly our
intention to maintain a double A rating.”

Stock Market News

(Additional reporting by Paul Hoskins, Myles Neligan, Matt
Scuffham and Tom Bergin; writing by Andrew Callus)

UPDATE 3-BP resists div cut pressure; plans Q2 charge