Home > Business/Markets, Environment, US News > BP disaster costs rise to $8bn

BP disaster costs rise to $8bn


[ Date : Sep 3rd, 2010 ]

BP_disaster_costsBP said on Friday that the cost of responding to its Gulf of Mexico oil spill had risen by almost $2bn over the past month to about $8bn.

The UK oil and gas group also said that it was in the process of replacing the blow-out preventer that had failed when the leak from the Macondo well began in April. The well was plugged by a “static kill” operation in August.

BP added that the relief well that is being drilled as a final corrective measure was expected to intercept the Macondo well in mid-September, weather conditions permitting.

The British company, which is set to publish the results of its own investigation into the Gulf of Mexico incident in the next fortnight, has committed to paying $20bn into an escrow fund to cover claims arising from the spill.

It is also looking to make up to $30bn of disposals and has got a third of the way towards this total following the announcement this week of a $363m deal to sell Malaysian petrochemical assets to Petronas.

Since August 23, over 42,000 claims have been submitted to a new body led by Ken Feinberg that is processing compensation requests using money in the escrow fund, BP said on Friday.

Almost 5,000 of these claims have been paid, at a cost of $38.5m. BP had previously made 127,000 claims payments at a cost of $399m.

The update from BP came as officials investigated a fire that broke out on Thursday at a Gulf of Mexico production platform operated by Mariner Energy, an independent oil and gas company.

The incident, which was extinguished without any injuries occurring, has added to the regulatory scrutiny faced by the industry in the wake of the BP spill.BP shares rose 0.6 per cent to 394¾p in early morning trading in London on Friday.

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