NY Times – The oil giant BP tried to reassure investors Thursday that it had the financial flexibility to handle the growing costs of the oil spill in the Gulf of Mexico.

In London, business leaders urged the British government to defend BP against mounting political pressure from Washington where lawmakers have called on the company to suspend its dividend and advertising to pay for the cleanup. A senior official also said the Justice Department was “planning to take action.”

That sent BP depositary shares tumbling 15.8 percent Wednesday in New York. Shares in London were down 7.1 percent Thursday, but were up almost 9 percent in New York trading. Shares fallen about 42 percent since the Deepwater Horizon drilling rig exploded April 20.

The threats to BP’s dividend are particularly worrisome among investors because the company has long had a reputation as one of the most dependable dividend payers, making it an attractive holding for retirees and others who need a steady income.

“We don’t believe BP has a funding issue, but given the overwhelmingly hostile nature of the U.S. government the company may decide to suspend payments until the wells are capped and the clean-up sufficiently advanced to convince the U.S. that it can afford all the costs as well as pay dividends,” an analyst at Evolution Securities, Richard Griffith, told The Associated Press. “Unilateral action against BP over its U.S. operations, be it unreasonable or illegal, hangs over BP.”

Last year, the company paid about $10.5 billion in dividends. It is one of the largest and most widely held British stocks.

Business leaders on Thursday urged the British government to get involved.

“It’s a matter of concern when politicians get heavily involved in business in this way,” Richard Lambert, head of the CBI, the leading British business lobby group, said in an emailed statement, according to Reuters.

But Reuters quoted Prime Minister David Cameron as saying, “This is an environmental catastrophe. BP needs to do everything it can to deal with the situation, and the UK government stands ready to help. I completely understand the U.S. government’s frustration.”

Earlier, a spokesman for Mr. Cameron said the prime minister would be discussing the issue with President Obama in a weekend telephone call.

The company’s market capitalization has dropped by about half since the leak began. The expense of cleaning up the oil spill continue to grow; the cost of the response effort so far is about $1.43 billion, the company said Thursday. Some on Wall Street fear the company could be forced to seek bankruptcy protection or a merger, though the company had $6.84 billion in cash on hand at the end of the first quarter, according to its financial statement.

The company’s market capitalization has dropped by about half since the leak began. The expense of cleaning up the oil spill continue to grow; the cost of the response effort so far is about $1.43 billion, the company said Thursday. Some on Wall Street fear the company could be forced to seek bankruptcy protection or a merger, though the company had $6.84 billion in cash on hand at the end of the first quarter, according to its financial statement.

BP’s debt is trading at junk levels, and the cost of insuring it against default with credit-default swaps has soared in recent days. While the company is still rated at investment grade, Standard & Poor’s last week cut its long-term rating on BP to AA- from AA and said the outlook for its long- and short-term corporate credit ratings was negative.

The interior secretary, Ken Salazar, said Wednesday that BP would be asked to compensate energy companies for losses if they had to lay off workers because of the six-month moratorium on deepwater drilling that the government has imposed.

Iain Conn, BP’s chief executive for refining and marketing, said Wednesday in London that BP was “totally committed to the cooperation with the administration” and that the company and the government were “joined together in a desire to mitigate this problem.”

The oil is not expected to stop gushing from the well until August at the earliest, when relief wells are completed.

In a report Thursday, the International Energy Agency said the ongoing oil spill could prove to be a “game changer” because it could restrict future undersea oil development and limit supply.

“Emotion is understandably running high, and the way deepwater hydrocarbon developments are approved, operated and regulated will of course be thoroughly examined and potentially amended,” the agency said in its monthly oil market report.

Increasingly frustrated American lawmakers have been echoing comments last week by Mr. Obama, who criticized BP for spending $50 million on TV advertising while people whose livelihoods were wrecked by oil spill were reporting difficulties in getting their claims paid.

Thomas J. Perrelli, the associate attorney general, testified Wednesday before a House committee that “we are looking very closely at this, and we are planning to take action.” And the Coast Guard is pressing BP to come up with a better plan for capturing the thousands of barrels of oil spilling into the Gulf of Mexico.

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