BP prepares for Gulf of Mexico oil spill lawsuits

Tuesday, February 7, 2012
  • The BP oil spill bill hits $43billion.

BP prepares "vigorously" for lawsuits related to its Gulf of Mexico oil spill, due to start later this month, as it unveiled a rise in fourth-quarter earnings boosted by higher oil prices and one-off gains.

Chief Executive of BP, Bob Dudley, said that BP was ready to settle on "fair and reasonable terms" but added he was also ready to fight.

These comments have come as the company unveiled fourth-quarter results, showing its estimate for the total cost of the spill rose by $1.8 billion in 2011 to $43 billion. However, some analysts think the final figure could be much higher.

The increased estimate reflected higher costs of shoreline clean up, which BP said was now largely complete, and a new $500 million charge related to legal costs beyond 2012.

Over $1 billion was set aside by BP to pay its lawyers, suggesting the disaster will end up a major boon for attorneys.

BP have said it faced around 600 civil lawsuits from people in states as far away as South Carolina and Kentucky, as well as litigation from the government and Gulf Coast states. Anadarko Petroleum and Japan's Mitsui, would reduce the final bill it faced.

The over $5 billion received by BP has contributed to the $20 billion fund created to compensate those impacted by the United States' worst-ever offshore oil spill, allowing BP to end its own payments into the fund in 2012, a year earlier than expected.

Progress in meeting the costs of the spill allowed BP to announce an increase in its dividend. It's dividend had been cut at the height of the spill in 2010.

Backed by strong cashflows due to higher oil price, BP has lifted the quarterly payout to 8 cents a share from 7 cents.

BP said its replacement cost net profit increased 65 percent compared to the same period last year, to $7.61 billion in the quarter, boosted by a $4 billion contribution from Anadarko.

This article is for information and discussion purposes only and does not form a recommendation to invest or otherwise. The value of an investment may fall. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser. More

Related News

Join 70,000 other oil and gas professionals

Network with others, build your profile, and receive the latest oil and gas news in your inbox. It's free!

Your details are never shared or sold. We hate spam too.

» More Jobs       » Upload a free Job       » Upload your CV

More Europe Jobs

More Global Jobs

Opinion & Commentary

  • Should we be in the Arctic?
    The sanctions-driven freeze on US and European involvement in the Russian Arctic gives us time to consider a fundamental question: Should we be exploring in the Arctic at ...
  • 99 Red Balloons...
    ...was the title of an anti-nuclear protest song by the German singer Nena and her group of the same name, released in German in 1983 and in English in 1984. It came into my head ...

» More Opinion & Commentary         » Write for us             RSS RSS

Oil & Gas Training

Introduction to Oil and Gas Exploration and Production
Dr Helen Turnell, London, 02 Oct 2014

Integrated Subsurface Description for Reservoir Development & Production
Mike Bowman, London, 15 Oct 2014

Delivering Information Management
Alan Smith, London, 28 Oct 2014

All Upcoming Training

Opinions & Commentary

Oil price, Ophir, Ithaca and sundry- FOGL-Thalassa- And finally...

by Malcolm Graham-Wood

Read More »