BP Oil Spill Costs Jump to $1.6 Billion

U.S. officials demand that BP set up a special fund to pay for claims

BP said on June 14 that the cost of sorting out the Gulf of Mexico oil spill had jumped due at 1200 GMT, to discuss whether to suspend payment of a shareholder dividend amid US pressure to do so in the wake of the oil spill disaster.

Ahead of the meeting, BP said that "the cost of the response to date amounts to approximately $1.6 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs."

The figure is up from an estimated $1.43 billion announced by BP on June 10. BP's market value has meanwhile fallen by an additional tens of billions of dollars with its share price plunging in recent weeks.

BP's share price was down 5.19% at 370.95 pence in midday London trade.BP's share price has plunged by as much as 49% since the BP-operated Deepwater Horizon rig sank on April 22.

Reports have said that BP will bow to massive U.S. pressure and decide to suspend dividend payments as its potential liability over the Gulf of Mexico oil spill soars. U.S. officials on June 13 demanded that BP set up a special fund to pay for claims.

President Barack Obama spoke to British Prime Minister David Cameron on June 12 about his criticism of BP and assured him it had "nothing to do with national identity," amid fears it could stoke an anti-British backlash.

BP said in a statement on June 14 that "work continues to collect and disperse oil that has reached the surface of the sea, to protect the shoreline of the Gulf of Mexico, and to collect and clean up any oil that has reached shore."

Coast Guard Admiral Thad Allen, in charge of the U.S. response to the Gulf oil spill disaster, said on June 13 that he expected BP's embattled chief executive Tony Hayward to attend a White House crisis meeting due Wednesday. Allen said issues at the top of the agenda would include oil spill containment options and the claims process for victims.

Copyright Agence France-Presse, 2010

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