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BP shares plunge amid fears of dividend cut

Shares in BP have plunged a further 6% amid concern in the City that the beleaguered energy company will cut its dividend to help pay for the clean-up of the Gulf of Mexico oil spill.

Shares in the huge oil and gas group closed 25.3p weaker at 383.6p, a loss on the day of 6.1% in London dealing. At one stage, the shares were trading as low as 382.1p.

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The oil spill, created when the Deepwater Horizon platform exploded and sank on April 30, has sent shares in the company tumbling in recent weeks. Before the disaster, they were trading at 648p.

On Tuesday, BP shares lost 5% after President Barack Obama said he would have sacked chief executive Tony Hayward over remarks he made.

Hayward made comments such as “I want my life back” and called the Gulf “a big ocean” in the wake of the disaster which killed 11 oil workers.

BP, which has lost 40% of its stock market value since the accident, provides crucial income for millions of pension savers, accounting for around £1 in every £7 of blue-chip dividend payouts every year.

The company has so far refused to comment on the future of dividends, with the board expected to make the decision at the end of July.

Investors do not, however, appear to be betting against BP by “shorting” its shares – selling in the hope of price falls – according to research from Data Explorers. Just 0.5% of BP’s shares are on loan with short-sellers, according to the firm, compared with around 4% for the average stock listed on the FTSE-100 blue-chip index.

Meanwhile, BP has bought terms like “oil spill” from search engine providers to help direct internet users to its website. BP said it would pay fees so its own website would rank higher when internet users search terms such as “oil spill”.

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