Spill bill puts BP in deeper water
BP has increased the amount it will pay this year for the Deepwater Horizon oil spill in 2010.
The company’s total bill for the disaster has now hit $65billion (£47.2billion).
Shares in the energy giant fell 14½p to 518¼p as it said it would take a further $1.7billion charge resulting from higher than expected compensation settlements in the fourth quarter of last year.
It said claims resolved in recent months were about seven times higher than anticipated, mainly owing to “significantly higher claims determinations” issued by the Court Supervised Settlement Program. The scheme was set up after the spill and included nearly 400,000 cases brought by individuals and businesses, ranging from tourism to seafood producers.
The cost was also raised by a court ruling last year that led to the recalculation of some payouts.
BP now expects cash payments for the Gulf of Mexico spill will be $3billion this year, up from its previous estimate of $2billion. The remainder of the charge will be distributed over a number of years. By the end of last October its bill covering clean up costs and legal fees linked to one of America’s worst environmental disasters, which killed 11 people in an explosion and spilled millions of barrels of oil into the water, had reached $63.4billion.
Charges have steadily increased since BP reached a $19billion settlement of federal and state claims in 2015. Although 99 per cent of the claims have now been resolved, the last few hundred are likely to prove the most complex and potentially sizeable.
BP said it would continue to “vigorously appeal against determinations of claims that it believes are non-compensable” under a settlement agreement.
Chief financial officer Brian Gilvary said: “With the claims facility’s work very nearly done, we now have better visibility into the remaining liability.
“The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at $50 per barrel.” THE Gym Group’s shares hit an 18-month high, up 5½p to 232½p, as it shaped up to hit annual profit forecasts.
Membership at the low-cost gym operator rose 35.5 per cent to 607,000 as it bought 18 sites from Lifestyle Fitness and opened 21 new outlets, to total 128. Revenue grew 24.3 per cent from the previous year.
Gym increased its share of the low cost market from 17.7 per cent to 22.4 per cent and said initial take-up of its premium pricing product, Live It, had been encouraging. It is targeting 15 to 20 new openings this year.
CEO John Treharne said: “After 10 years of operation we are still breaking records, underling the the constant evolution of our offer.”