(MENAFN- ProactiveInvestors) Global oil supermajor (LON:.) can ride out doubts about its dividend despite a US$20.8bn legal bill for the Gulf of Mexico disaster five years ago analysts said today.
This week it was confirmed that will have to pay nearly US$21bn over 18 years for its part in the Deepwater Horizon spill.
Broker Canaccord analyst Richard Griffith said: "If delivers the free cash flow generation we expect the market should draw confidence in the dividend sustainability and re-rate the shares."
Concerns have emerged about oil company dividends as crude prices have more than halved since autumn last year hitting investment and jobs.
Natural resource companies have slashed costs and investment rather than dividends for fear that investors will otherwise dump their shares.
On Monday the US Justice Department and five US states confirmed the final US$20.8bn settlement of claims relating to the accident.
faces civil penalties under the Clean Water Act of about US$5.5bn environmental damage costs of US$7.1bn and US$4.9bn of economic and other claims from the five states.
It will also pay US$232mln for unidentified future damages and up to US$1bn due to about 400 local government bodies totalling the US$18.7bn announced in July.
Monday's announcement also included US$1bn already committed by for early restoration US$600mln in other claims and US$500mln in interest charges.
The settlement was first agreed and announced in July and is expected to be finalised early next year following a 60-day public consultation.
It should increase total provisions made by for the blowout by about US$10bn to about US$54bn. will pay the bill over 18 years meaning annual pay-outs of about £1.1bn.
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