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Clean-up bill hits 2.65 billion dollars

Text by News Wires

Latest update : 2010-06-28

BP upped estimates of the total cost of the Gulf of Mexico Oil spill so far to 2.65 billion dollars, reporting on Monday that it had spent 300 million dollars on clean-up and containment efforts over the weekend alone.

AFP - BP raised the cost so far of its oil spill in the Gulf of Mexico to 2.65 billion dollars on Monday, an increase of about 300 million dollars over the weekend.
   
"The cost of the response to date amounts to approximately 2.65 billion dollars (2.14 billion euros), including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said in a statement.
   
"It is too early to quantify other potential costs and liabilities associated with the incident," it added.
   
The costs for BP are rising sharply on a daily basis. On Friday the bill stood at 2.35 billion dollars.
   
That works out at about 4.0 million dollars an hour on the basis that the figures were given three days apart.
   
But these figures are a drop in the ocean compared to the billions of dollars wiped off its market value.
   
BP's share price has collapsed by more than 50 percent since the Deepwater Horizon oil rig which the company operated sank on April 22, two days after a blast killed 11 workers. The shares hit a 14-year low point on Friday.
   
After coming under intense pressure from President Barack Obama over the worst ever US environmental disaster, BP has agreed to suspend its shareholder dividend and create a 20-billion-dollar fund for costs arising from the spill.
   
BP is also selling non-core assets to raise 10 billion dollars, while international ratings agencies have downgraded the company's credit worthiness.
   
Although Obama has vowed to hold BP accountable, the president has agreed with British Prime Minister David Cameron that the company should "remain a strong and stable company".
   
"The leaders agreed that BP should meet its obligations to cap the leak, clean up the damage and meet legitimate compensation claims," Cameron's office said in a statement issued after the meeting held before the G20 leaders' weekend summit in Toronto, Canada.
   
"They also agreed that it was to both countries' advantage for BP to remain a strong and stable company," Downing Street added.
   
A senior US administration official added that both leaders had agreed "BP has certain obligations and that those obligations have got to be met".
   
On Friday, Cameron warned against the "destruction" of the company, saying it was "important for all our interests".
   
Despite desperate efforts, BP is still not capping all of the 35,000 to 60,000 barrels of oil estimated to be spilling into the sea every day, saying it is managing to contain about 25,000 barrels daily.
   
BP's under-fire chief executive Tony Hayward last week handed over management of the Gulf of Mexico oil spill to another senior manager, Bob Dudley.

 

Date created : 2010-06-28

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