BP oil spill costs hit $1.6bn

BP oil spill costs hit $1.6bn

BP said the total bill for the Deepwater Horizon oil spill has jumped by $350m in the last week

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• Graeme Wearden
• guardian.co.uk, Monday 14 June 2010 08.29 BST
• Article history

BP has estimated the costs of the Deepwater Horizon at $1.6bn. Workers clean up the oil washed ashore in Alabama. Photograph: KeystoneUSA-ZUMA / Rex Features

Ths cost of BP‘s clean-up operation in the Gulf of Mexico has now hit $1.6bn (£1.1bn), but the final cost of the huge oil spill remains unquantifiable.

BP updated its shareholders this morning at the start of a crucial week for the company. It said the total bill has jumped by $350m in the last week, including payments of $25m each to the states of Florida, Alabama and Mississippi to help them fight the environmental damage of the disaster.

Around 51,000 compensation claims have been submitted, of which 26,500 have been paid. The oil giant admitted, though, that “is too early to quantify other potential costs and liabilities associated with the incident”.

BP’s board of directors will meet later today to discuss whether to bow to criticism and suspend its dividend payment for the current financial quarter. Barack Obama continued to pile pressure on the company over the weekend, calling for funds to be placed into an escrow account, where they would be ringfenced and used to pay compensation to those affected by the spill.

Obama will visit the Gulf region today, his fourth trip to the region, in an effort to persuade the American people that he has a grip on the catastrophe. On Wednesday he will speak with BP’s chief executive, Tony Hayward, for what may be a tense meeting – Obama recently said he would have sacked Hayward. But the real drama will come on Thursday, when Hayward appears at a congressional hearing. He has been summoned by the House Energy and Commerce Subcommittee to answer questions about the Deepwater Horizon explosion.

Shares in BP fell by 2% this morning to 384p despite the phone call on Saturday between David Cameron and Obama, which had eased fears that BP was becoming a target for “anti-British” sentiment. Downing Street revealed that Obama had insisted he had no desire to damage the value of BP.

BP also reported that it has now collected around 127,000 barrels of oil since fitting a container on to the well head 10 days ago. This oil has been syphoned up to the surface into a tanker, rather than being released into the ocean. But it only represents a fraction of the total leak, which is now estimated to be as much as 40,000 barrels per day.

The containment system will be modified within the next few days, which should increase the amount of oil that can be collected.

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