BP’s Gulf Oil Spill Costs Nearly $50B
BP PLC estimated in 2010 that it faced about $40 billion in potential liabilities from the Deepwater Horizon disaster that killed 11 workers and spilled oil into the Gulf of Mexico for months. Now its shares are suffering as the total approaches $50 billion. Here’s where the company’s money is spilling:
- Damage Claims and Environmental Restoration: BP says it has paid more than $27 billion to restore the Gulf Coast and compensate victims in an uncapped settlement fund.
- Federal Fines: BP agreed in November 2012 to pay $4.5 billion in civil and criminal fines and pleaded guilty to felonies related to the rig workers’ deaths and lying to Congress.
- Pollution Penalties: U.S. District Judge Carl Barbier ruled this month that BP showed willful misconduct and gross negligence in the oil spill, exposing the company to as much as $18 billion in Clean Water Act fines, up to $4,300 per 42-gallon barrel of oil spilled.
- Bottom line: BP shares plummeted after the Sept. 4 ruling, reducing its market value by nearly $9 billion that day. Its stock price has yet to recover.
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