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U.K. prepared to back BP 

U.K. Prime Minister David Cameron said during a visit to Afghanistan Wednesday that the “U.K. government stands ready to help.” SHAH MARAI/AFP/Getty Images

Janet Whitman, Financial Post · Thursday, Jun. 10, 2010

NEW YORK -- The backlash against the BP PLC backlash is building.

Days after Barack Obama, the U.S. President, said he was looking for whose “ass to kick” for BP’s record oil spill in the Gulf of
Mexico, the U.K.’s new prime minister and another top government official came out in support of the beleaguered British oil
company.

The public backing from the U.K. government comes as many citizens in the region are seeing a big chunk of their pensions evaporate
as BP’s shares sink sharply and the Obama administration comes under increasing pressure to force BP to suspend its dividend
payments to shareholders until the leak is plug the mess is cleaned up.

BP’s stock has plunged more than 40% — wiping out more than US$70-billion of the company’s value — since the explosion of the
Deepwater Horizon drilling rig in late April. With stock markets rallying and a growing small chorus of BP defenders making their
voices known, the stock had its best day since the beginning of the crisis, up more than 12%.

Once the most valuable company in the U.K., BP paid out more than US$10-billion in dividends last year, much of that going to U.K.
and U.S. pension funds that hold the company’s shares.

Making his first public comments since the oil rig explosion, U.K. Prime Minister David Cameron said during a visit to Afghanistan
Wednesday that the “U.K. government stands ready to help.”

“I completely understand the U.S. government’s frustration,” he said. “The most important thing is to try to mitigate the effects and
get to grips with the problem.”

Mr. Cameron said he intends to discuss the issue with President Obama. The two are scheduled to talk on the phone this weekend.
The Prime Minister declined to weigh in on the “anti-British rhetoric” London’s mayor and others in Britain have accused the United
States of spreading.

George Osborne, the U.K. Treasury chief, told The Wall Street Journal in an emailed statement that the Prime Minister asked him to
call Tony Hayward, BP’s chief executive. “The Prime Minister is … clear that we need constructive solutions and that we remember

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the economic value BP brings to people in Britain and America.”

Juliet Huck, an expert in persuasive communications and head of The Huck Group, said the U.K.’s show of support is an interesting
first step.

“But we’ll see if they put both feet in or there may be a backlash against them as well,” she said. “People want to see action.”

Industry observers don’t expect to see a real change in BP’s fortunes until the oil giant manages to plug the gushing well, mount a
massive cleanup and compensate workers and businesses in the region that have lost income or gone out of business.

“The company needs to focus on capping the well and demonstrating a commitment to cleaning up the environment,” said Gene
Grabowski, senior vice-president of Levick Strategic Communications in Washington and chair of the company’s crisis and litigation
practice. “Anything they might do beyond that, no matter how well intended, could backfire.”

BP has bungled its communication on the issue from the start, said Mr. Grabowski.

BP’s chief executive, Tony Hayward “wasn’t seen taking off his jacket and showing his shirt sleeves until five weeks into the crisis,” he
said. “The company also has failed to manage expectations. Each week brought another attempt and failure. They didn’t manage
expectations by saying what are the outside chances of failure.”

Michael Gordon, the principal in Group Gordon Strategic Communications, said BP needs to say, “we’re going to make everybody
whole, period. No weasel words.”

Financial Post, with files from Reuters and Bloomberg News

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http://www.financialpost.com/news/prepared+back/3138482/story.html 6/10/2010