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BP Shares Plunge to 13-year Low on Oil Spill Liabilities

Costs are now up to $2.35 billion

fter BP ramped up the costs so far of its oil spill crisis in the Gulf of Mexico to 2.35 billion dollars, its shares crashed to a 13-year low point on June 25.

But this is a drop in the ocean compared to the billions of dollars wiped off the oil giant's capitalization and in unknown liabilities, turning it from a sure income generator into a risky bet, in the view of one analyst.

The energy giant's stock collapsed by almost 9% in mid-morning trading to plumb a low of 296 pence on the London Stock Exchange, as investors showed alarm about spiraling costs.

"Many investors are capitulating as BP has gone from a solid dividend-paying cash cow to a high-risk punt," GFT analyst David Morrison said. "It's under 300 pence for the first time in 13 years as it becomes impossible to have even the vaguest notion about what the company's liabilities may finally be."

The shares have collapsed by more than 50% -- wiping billions of dollars off BP's stock market value -- since the Deepwater Horizon oil rig which it operated sank on April 22.

"The cost of the response to date amounts to approximately $2.35 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said on June 25.

Copyright Agence France-Presse, 2010

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