BP Share News (BP.)

THE NEWS U.S. lawmakers blasted BP PLC (BP, BP.LN) Chief Executive Officer Tony Hayward on safety standards, with the CEO saying "I deeply regret" the oil spill in the Gulf of Mexico that threatens four U.S. states. BP, responding to pressure from U.S. authorities, agreed Wednesday to put $20 billion in a fund to compensate victims and said it would cancel shareholder dividends. THE ACCUSATIONS House Energy and Commerce Committee Chairman Henry Waxman (D, Calif.) blasted the CEO, saying congressional investigators "found no evidence that you paid any attention to the tremendous risks BP was taking." Lawmakers have cited emails from BP officials in accusing the company of taking shortcuts on safety and ignoring the advice of key contractors. The oil spill began after the Deepwater Horizon drilling rig exploded and sank in April, killing 11 workers and unleashing the worst offshore oil spill in U.S. history. HAYWARD RESPONDS BP CEO Hayward, sworn in under oath, told the committee that the situation is "a tragedy" and said that "I deeply regret" the impact the spill has had on people and the environment. He said that while "we don't yet know" the causes of the April 20 blowout, the company is "doing everything we can" to secure the well and "we will make this right." Rep. Bart Stupak (D, Mich.) asked, "are you trying to tell me you have not reached a conclusion that BP really cut corners here?" Hayward responded that "it's too early to reach conclusions." In an effort to earn back goodwill, BP agreed put $20 billion into a fund to compensate businesses and individuals hurt by the spill, which has affected costal areas of Louisiana, Alabama, Florida and Mississippi. THE FUND BP will reduce capital spending, suspend its dividend and sell assets to raise the cash. The move to halt the dividend could cost BP shareholders, many of them U.K. pension funds, roughly $7.5 billion during the next three quarters. The oil company said it would also set aside $100 million to help oil-industry workers sidelined by the Obama administration's moratorium on deepwater drilling. EFFORTS TO STOP THE LEAK A second BP containment system has begun collecting oil. U.S. Coast Guard Adm. Thad Allen said that vessel would add 2,000 to 3,000 barrels a day to the amount captured by the main vessel connected to the leak, bringing the total amount to between 16,000 and 17,000 barrels a day. Scientists have estimated 35,000 to 60,000 barrels of oil are flowing into the Gulf each day. Allen said BP hopes to increase the capture capacity to 28,000 barrels a day by early next week, 53,000 barrels by the end of June and, if needed, 60,000 to 80,000 barrels by the end of July. Efforts to drill a relief well--through which BP would pump cement to plug the leak--are progressing "ahead of schedule," Allen said. The target date for completing the effort is mid-August. MARKET REACTION BP's ADRs fell 21 cents in recent trading to $31.64. BP has lost nearly half its market value since April. In London, shares were up 6.7% at 359.70 pence on hopes the $20 billion deal would ease the political heat on BP. The most active BP bond, the 1.55% note due August 2011, saw its spread over Treasurys creep marginally wider. The cost of insuring BP's debt declined on news of the agreement with the U.S. Credit default swaps were quoted by Markit at 465 basis points, meaning it would cost $465,000 to cover $10 million of debt each year for five years. That's down from Wednesday's all-time high of 625 basis points before BP announced the fund and its dividend cut. DOW JONES COVERAGE -US Rep Waxman Blasts BP CEO At Congressional Hearing -WSJ: BP Agrees To $20 Billion Fund -Adm. Allen: Could Capture 28,000 B/D Of Oil By Early Next Week -BP Shares Surge After $20B Oil Spill Fund Deal -BP CEO: To Tell Congress He Grasps Spill's 'Terrible Reality' -For more coverage of the oil spill, please search under the code BP. (END) Dow Jones Newswires June 17, 2010 13:19 ET (17:19 GMT)