Obama, Britain’s Cameron try to smooth diplomatic waters as tensions rise over BP oil spill

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Obama tells Britain no hard feelings over spill

LONDON — President Barack Obama reassured Prime Minister David Cameron on Saturday that his frustration over the mammoth oil spill in the Gulf of Mexico is not an attack on Britain as the two leaders tried to soothe trans-Atlantic tensions over the disaster.

Cameron’s Downing St. office said the two leaders held a “warm and constructive” telephone conversation for more than 30 minutes.

Obama has recently sharpened his criticism of BP PLC as the company struggles to stop millions of gallons of oil gushing from its ruptured deep-sea well. Cameron is under pressure to get Obama to tone down the rhetoric against of a major British company, fearing it will hurt millions of Britons — as well as many Americans — who hold BP stock in investments and pension plans.

Cameron’s office said the prime minister “expressed his sadness at the ongoing human and environmental catastrophe,” but stressed BP’s economic importance to Britain, the U.S. and other countries.

It said Obama recognized that BP — which he has pointedly referred to in public by its former name, British Petroleum — is a multinational company, “and that frustrations about the oil spill had nothing to do with national identity.” Obama said he had no interest in undermining BP’s value. The company’s stock has lost 40 percent of its value since the oil rig fire on April 20 that unleashed the United States’ worst oil spill.

Downing Street said the two men agreed that BP should continue “to work intensively to ensure that all sensible and reasonable steps are taken as rapidly as practicable to deal with the consequences of this catastrophe.”

The Obama administration walked a careful line Saturday: trying to show toughness with BP, but also reassuring Britons that the president holds no animosity toward their country and institutions. The strategy could be risky if Obama’s political opponents use it to reinforce claims that he has been too gentle and diplomatic in dealing with the oil company.

Before the Obama-Cameron phone call took place, the U.S. government told BP it has until the end of the weekend to speed up efforts to contain the oil spill.

Later, the White House let Cameron’s office make the first public remarks about Saturday’s phone call. Downing Street used the opportunity to stress that Obama is not attacking Britain and that he recognizes BP as a global firm.

When the White House finally released its official statement, only one of the 10 sentences referred to the oil spill. It said the two men discussed the impact of the spill, “reiterating that BP must do all it can to respond effectively to the situation.”

Minutes later, a senior Obama administration official, speaking on condition of anonymity to describe the private conversation, confirmed that the president had told Cameron “that our frustration has nothing to do with national identity” but focuses instead on “ensuring that a large, wealthy company lives up to its obligations.”

The official said Obama told Cameron that BP “must meet its obligations to those whose lives have been disrupted,” and that the administration “will insist everything be done to cap the well, capture the oil, and pay for the cleanup, the environmental damage done and the tens of thousands of economic claims as a result of this disaster.”

BP has been ordered by the U.S. Coast Guard to speed up its efforts to stop oil gushing into the sea off the coast of Louisiana.

U.S. Coast Guard Rear Adm. James A. Watson sent a letter to BP officials on Friday expressing frustration with the overall pace of the effort and ordered the company to identify ways to expedite the process in the next 48 hours.

Downing Street also said Cameron and Obama reaffirmed their belief in “the unique strength of the U.S.-UK relationship.” It announced that Cameron will visit Washington July 20, his first trip there since taking office in May.

The warm words come after vocal criticism of BP by Obama, who has said he would have fired BP’s top executive, if he were in charge, and has supported the idea that the oil company suspend its quarterly dividend.

In a sign the company feels the pressure, BP said Saturday that its board would meet Monday to discuss deferring its second-quarter dividend and putting the money into escrow until the company’s liabilities from the spill are known. BP said no decision had yet been made.

Obama also has reproached BP for spending money on a public relations campaign and occasionally refers to “British Petroleum,” although the company years ago began using only its initials and is a far-reaching international corporation with extensive holdings in the United States, including a Texas refinery and a share of the Alaska oil pipeline.

This past week, the usually measured Obama said in a television interview, “I don’t sit around just talking to experts because this is a college seminar; we talk to these folks because they potentially have the best answers — so I know whose ass to kick.”

The angry words from Washington have produced a backlash in Britain, where BP is a corporate pillar. Millions of British retirees depend on BP dividends since pension funds are heavily invested in the oil company, the world’s third-largest.

British officials began taking a more hands-on approach Friday, when Treasury chief George Osborne met BP’s chairman, Carl-Henric Svanberg, and Cameron spoke to Svanberg by phone.

Svanberg, who has faced criticism for not being more visible in BP’s response to the Gulf spill, is to meet with Obama at the White House on Wednesday. Probably joining him will be CEO Tony Hayward and other BP executives. It will be the first time Obama has met with BP officials since the crisis began.

Hayward will testify at a U.S. House of Representatives hearing on Thursday.

Associated Press Writers H. Josef Hebert and Charles Babington in Washington contributed to this report.