Monday 26 June 2017

BP shares hit 13-year low as clean-up cost soars

Shares in BP plunged to new 13-year lows today as the under-fire firm said the cost of the Gulf of Mexico oil disaster had reached $2.35bn (€1.91bn).

The battered stock fell more than 6pc with no sign of an end to BP's woes in sight.

Chief executive Tony Hayward insisted the oil group's health had stabilised and was in the "intensive care" ward when he met company staff in Sunbury yesterday.

But investors continued to head for the exit, despite assurances in today's update that progress on the relief well and measures to improve the capture of oil from the leaking well were on track.

BP said it was putting in place another support system for the containment cap within the next week.

The group also confirmed its two relief wells - intended to kill the leaking well - are set to be completed within three months of the date work began, following reported concerns in America they could take longer.

But there are said to be mounting fears over the approaching hurricane season in the Gulf, with reports of a potential storm next week that could hamper the response operation.

The group has so far captured around 364,500 barrels of oil through its containment system, but it is estimated around 35,000 to 60,000 barrels a day are continuing to pour from the well, which ruptured after the Deepwater Horizon oil rig exploded on April 20, killing 11 workers.

Mr Hayward officially handed over day-to-day control of the Gulf of Mexico crisis to BP board director Bob Dudley earlier this week as it set up a new division to manage the spill.

The group was reportedly planning a mammoth fundraising programme to shore up its finances as the clean-up bill soars.

As well as the ongoing cost of the operation and claims, it has also set aside a $20bn (€16.3bn) compensation fund for those affected by the spill.

Mr Hayward's meeting with staff yesterday came as part of moves to reassure investors the group will survive the crisis.

He is said to have told employees that operating results due out next month will be "very strong", although also noting the group's need to sell assets and show balance sheet strength to deal with the liabilities.

Press Association

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