BP's Bill for Oil Spill Disaster Hits $2 Billion

June 21, 2010
Hayward hands over day-to-day management of the Gulf oil leak operation to another top manager, Bob Dudley.

On June 21 BP announced that it has spent about two billion dollars in its response to the massive oil spill in the Gulf of Mexico, sending its share price sliding once again.

"The cost of the response to date amounts to approximately $2 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said in an official statement.

The British energy giant also referred to the creation of a $20 billion fund "to satisfy certain obligations" arising from the oil spill, which was hammered out with President Barack Obama on June 16.

"It is too early to quantify other potential costs and liabilities associated with the incident," the company added.

In response to the news, BP's share price slid 3.5% to 345.30 pence in morning deals on the FTSE 100 index of leading companies, which was 1.19% higher.

On Friday, BP shares had soared as traders welcomed clarity over the group's costs and shareholder dividend suspension.

But its damaged public image was left in tatters after furious U.S. lawmakers pilloried the energy giant's boss Tony Hayward on June 17, accusing him of stonewalling on the causes of the Gulf of Mexico oil spill. Hayward suffered another PR blow at the weekend for attending a yacht race in Britain. BP has announced that Hayward is handing over day-to-day management of the Gulf oil leak operation to another top manager, Bob Dudley, an American.

In its statement on June 21, BP also updated some of its response operations including operations to skim oil from the surface of the sea which have recovered in total about 558,000 barrels (23.4 million gallons) of oily liquid.

On the drilling of relief wells, BP said the first well has reached a depth of 15,936 feet, and the second one was at 10,000 feet. The company added however that it is still estimated to take about three months to complete both wells, putting the target date as August.

Copyright Agence France-Presse, 2010

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