The Daily Spill: How You May Profit From BP Oil With Possible $10 Billion Dividend Payout

The Daily Spill serves you up the latest developments as oil continues to coat the Gulf.

With BP stock prices plunging and his future in doubt, CEO Tony Hayward just told an investor meeting this morning he is mindful the company's spill response "does not distract" from BP's long-term business plans.

He said that as he punted on the question of whether BP will pay out some $10 billion in shareholder dividends due this year. The first chunk of that is due to be paid on June 21, and the board will make a decision on the second quarter this summer. BP is under enormous pressure to reassure investors but also faces political pressure to ensure it can meet its responsibility to pay for the repercussions of the accident.

You, reader, may unwittingly stand to profit from this money, since many BP investors are investment, pension and retirement funds that rely on the oil giant's reliable corporate rewards in the form of regular dividends.

A list of the Top Ten Investors in BP after the jump.

Two Democrat senators have called on Hayward to stop the payout because the true costs of the spill are so uncertain -- a fact Hayward admitted this morning, due to uncertainties of when the spill will be contained and the long-term cleanup and liability payments. One estimate by Credit Suisse puts the ultimate cost to BP at $37 billion.

It's true that BP can probably take the hit, since not all of that money will be paid out at once. As the Wall Street Journal reports, "BP is a cash cow -- it generated $7.7 billion from operating activities in the first quarter, and $27.7 billion for all of 2009. BP also regularly sells off parts of its giant portfolio of assets."

Still, the Senators Chuck Schumer (NY) and Ron Wyden (Ore.) are right that the payout is "unfathomable" right now, and it just hits you in the gut to know that people are making money off of BP, when fisherman are hurting in the Gulf during the worst environmental disaster in U.S. history.

The sad thing is that BP can pay what it wants to shareholders, a full 40 percent of which are in the United States.

But we as investors have power too. Many of you may have or know someone who owns a retirement plan or mutual fund. Do your due diligence and make sure BP or other oil companies are not part of those portfolios. If you do own BP stock through these investments, you should pressure your investment company to sell those stocks, divest yourself, and make sure any dividend profits are donated to the Gulf cleanup.

Just an example: Blackrock -- the world's largest asset management company and a large player in the financial bailout-- manages $4.5 billion of Oregon pension and school funds, according to this article. The company, based in New York, also happens to be BP's largest investor, owning 5.9 percent of BP shares, as reported by the UK Telegraph.

If BP does payout $10 billion in dividends, BlackRock therefore could receive hundreds of millions of dollars. If the firm was going to be a responsible investor, they should return some of that money to helping restore the Gulf and support out-of-work coastal residents affected. Big investment firms could also sell their shares and hit BP where it hurts.

UPDATE (6/14): The New York Times has just published a better listing of BP's American shareholders here.

Here is a list of the top ten BP shareholders, from the Telegraph:

3) Barclays Global Investors: The asset manager, which is owned by BlackRock, owns 3.8 percent of the shares.

4) Norges Bank Investment Management: The asset manager manages the money generated from Norway's oil revenues and owns 1.8 percent of the shares.

5) Kuwait Investment Authority: The body manages the funds for Kuwait government. It owns 1.75 percent of the shares.

6) M&G Investment Management: The UK asset manager, owned by the Prudential, owns 1.67 percent of the shares.

7) Standard Life: The Scottish insurance company owns 1.5 percent of the shares.

8) Capital Research & Management Co: The Los Angeles-based fund owns 1.3 percent of the shares.

9) Insight Investment Management: The fund manager owned by Lloyds Banking Group owns 1.13 percent of the shares.

10) China's State Administration of Foreign Exchange: The body that manages China's $2.4 trillion of foreign-exchange reserves owns 1.1 percent.

Photo Credit: U.S. EPA