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.
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