Business World

Friday 15 December 2017

BP in latest oil well blocking bid

BP will discover today whether its latest attempt to stem the flow of oil in the Gulf of Mexico was successful amid fierce criticism of its response to the disaster from US President Barack Obama.

The oil firm is working on lowering a cap on to a leaking well using robot submarines.

Chief executive Tony Hayward said BP would know today how successful the attempt had been.

Mr Obama said he was "furious" about the oil spill and accused BP of not responding quickly enough.

In an interview for CNN's Larry King Live, Mr Obama said: "I am furious at this entire situation because this is an example where somebody didn't think through the consequences of their actions."

The US government is sending BP a bill for $69m (€57m) for costs so far, the White House said yesterday.

Meanwhile the beleaguered firm came under further pressure yesterday after its credit rating was cut amid fears over the soaring cost of the spill.

Concerns over the failure of repeated attempts to tackle it and the threat of a criminal investigation prompted ratings agency Fitch to cut the firm's credit rating from AA-plus to AA.

Moody's also cut its rating with warnings over the legal and financial burdens "likely to persist in the years to come".

The cuts will hurt BP because they raise the cost of its funding.

BP's shares recovered slightly yesterday after two days of heavy falls, but since the Deepwater Horizon rig exploded and sank on April 20 - killing 11 workers - around a third of its value has been wiped out.

Moody's also expressed concern over the "mounting political pressure" on BP as US politicians lined up to attack the company.

Fitch added that the firm could suffer further downgrades if investment in new projects was diverted to tackle the crisis, and the clean-up bill exceeded its current worst-case scenario of around $5bn (€4.1bn) in any one year.

BP said earlier this week that the disaster had cost it $990m (€813m) so far.

Its last "top kill" attempt to block the leaking oil well proved unsuccessful.

If the latest attempt fails, the firm may be left with no other option than to rely on drilling relief wells that will take three months to complete.

Oil is spewing from the well at a rate of 12,000 to 19,000 barrels a day, meaning that between 18 and 40 million gallons has already been dumped into the Gulf, according to US government estimates.

BP has said it will pay $360m (€295m) to fund six barrier "islands" to protect the Louisiana coastline.

Press Association

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business