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Tuesday 19 June 2018

BP takes another £1.2bn hit from Deepwater Horizon disaster

The group said despite the fourth-quarter hit, the lengthy settlement process for the mammoth claims related to the spill is now winding down.

BP said it would take a 1.7 billion US dollar hit in the fourth quarter of 2017 from the Deepwater Horizon oil spill in 2010 (Nick Ansell/PA)
BP said it would take a 1.7 billion US dollar hit in the fourth quarter of 2017 from the Deepwater Horizon oil spill in 2010 (Nick Ansell/PA)

By Holly Williams, Press Association Deputy City Editor

Oil giant BP has said it will book another 1.7 billion US dollar (£1.2 billion) charge from the Deepwater Horizon oil spill in 2010 as part of the settlement for the disaster.

But the group said despite the fourth-quarter hit, the lengthy settlement process for the mammoth claims related to the spill is now winding down.

BP said cash payments related to the blast – which killed 11 rig workers and led to millions of gallons of oil being spewed into the Gulf of Mexico – are now expected to be around 3 billion US dollars (£2.2 billion) in 2018, rather than its previous estimate of just over 2 billion US dollars (£1.5 billion).

The fourth-quarter charge was made to cover remaining payments to businesses to compensate for economic losses from the oil spill and other claims linked to the court-supervised settlement programme as a result of BP’s class action settlement.

Brian Gilvary, BP’s chief financial officer, said: “With the claims facility’s work very nearly done, we now have better visibility into the remaining liability.

“The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at 50 US dollars per barrel.”

The bill for the 2010 Gulf of Mexico spill had already reached more than 62 billion US dollars (£45 billion) by last December.

But BP said in its latest update on the cost of the tragedy that it will continue to “vigorously appeal determinations of claims that it believes are non-compensable under the Plaintiffs’ Steering Committee settlement agreement”.

Press Association

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