Business World

Saturday 22 July 2017

BP shares plunge as clean-up to cost billions

Shares in BP plunged nearly 10pc last night
Shares in BP plunged nearly 10pc last night
Peter Flanagan

Peter Flanagan

SHARES in BP plunged nearly 10pc last night as the US government proposed the oil giant set aside billions to pay for the impact of the oil spill in the Gulf of Mexico and it emerged that the company may suspend its dividend.

At close of business yesterday, BP had fallen to £3.55 (€4) on the London Stock Exchange, down 9.3pc on the day. The company's value has almost halved since the Deepwater Horizon rig exploded on April 20 and sank off the coast of Louisiana, killing 11 workers. US President Barack Obama was expected to outline plans to compel BP to place $20bn (€16.3bn) in an escrow account to pay for the clean-up efforts in the Gulf and to compensate businesses and individuals for the damage caused.

White House spokesman Bill Burton said that the president was confident that the company would agree to setting up the account. "We feel confident that this is going to be able to move forward," he said.

He declined to comment specifically on the size of the account beyond saying that it would be in the billions of dollars to ensure "everyone affected by this is made whole".

"We will work with BP to make a determination," Mr Burton said.

Meanwhile, the BP board will discuss the dividend payment during a teleconference.

The company said yesterday that its response to the incident had so far cost $1.6bn (€1.3bn).

Mr Obama accused the oil firm of "nickel and diming" Gulf residents while paying big dividends to investors.

Irish Independent

Promoted articles

Also in Business