BP’s Deepwater Horizon bill rises by $200m as profits fall

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Deepwater Horizon disaster

Deepwater Horizon disaster, 2010: BP’s bill keeps rising. Photograph: Handout/Getty Images

BP has been forced to set aside an extra $200m (£123m) for the Gulf of Mexico oil spill, bringing the bill so far to $42.7bn.

The final figure could be far higher, however, as the latest tally does not take account of additional provisions for economic loss claims from a further legal settlement BP has made, the group said. BP is also waiting for a final US court decision over whether it was considered grossly negligent for the Deepwater Horizon accident.

That could add a further $20bn to the final bill because it would bring cash penalties under America’s Clean Water Act.

The latest update on the continuing costs of the Macondo blowout from 2010 came as BP issued final quarter results for 2013.

Exploration write-offs, weaker refining margins and the impact of a huge divestment programme pushed those results – on an underlying cost basis – down to $2.8bn, compared with $3.9bn for the same period in 2012.

Full year profits on the same basis were $13.4bn compared with $17.1bn for 2012.

The figures, considerably better than those released last week by Shell, were helped by a $1bn income boost from BP’s new holding in the Russian firm Rosneft plus some strong oil and gas production in the North Sea and Gulf of Mexico.

BP has rewarded shareholders with a fourth quarter dividend of 9.5 cents a share, 5.6% higher than the one handed out in same period last year.

Bob Dudley, the oil firm’s chief executive, said he was pleased with the results: “BP delivered strong operating performance throughout 2013, with increased asset reliability and major project delivery in both our upstream and downstream businesses. These achievements underpin our financial targets for 2014 and lay the foundation for continued growth in sustainable free cash flow.”

BP had been forecast by analysts to produce profits of $2.7bn in the fourth quarter, 32% lower than the same period last year. Shell saw a 71% dive in earnings and a profit warning while BG, another rival, also issued a profit warning.

But BP has continued to struggle to rid itself of the legacy from the Deepwater Horizon accident in which 11 oil workers died and miles of beaches were polluted.

Last week the US department of justice said BP should remained barred from winning new contracts in the Gulf of Mexico because the company had still not demonstrated it was a “responsible” contractor. A court in New Orleans is deliberating over whether BP acted with “gross negligence” or not.

This month BP failed to overturn judicial approval of a compensation settlement it reached in 2012.

But BP said on Tuesday that 2013 was the best year for oil and gas finds in almost 10 years. The firm also recently announced it had won permission to drill in environmentally sensitive waters off Greenland, though it will not act as operator.

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One Response to BP’s Deepwater Horizon bill rises by $200m as profits fall

  1. Pingback: BP’s Deepwater Horizon bill rises by $200m as profits fall | MemePosts

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