BP adds another $1 billion to Deepwater Horizon’s costs
BP expects the cost of paying off the remaining economic-loss claims stemming from the 2010 Deepwater Horizon disaster to reach $1 billion more than initially anticipated, the company said Tuesday.
The British oil company estimated it will make some $3 billion in cash payments this year for claims related to a court-supervised settlement program that is winding down after several years. Last year, it said it estimated those payments would come in at $2 billion for 2018.
“With the claim facility’s work very nearly done, we now have better visibility into the remaining liability,” Brian Gilvary, BP’s chief financial officer, said in a statement.
BP said it will take a $1.7 billion charge in its fourthquarter earnings, pay $1 billion of it in 2018, and distribute the remaining payments over the next few years. Gilvary said BP can
manage the charge, “especially now that we have the company back into balance at $50 per barrel.”
In April 2010, a blast on the BP-leased Deepwater Horizon drilling rig killed 11 workers and led to the biggest offshore oil spill in U.S. history. Millions of barrels of oil spilled into the Gulf of Mexico, spoiling beaches, fishing grounds and wetlands and hurting Gulf Coast tourism, fishing and other industries.
The latest charge, which will add to the $60 billion BP has paid in penalties, will cover payments to business owners in the area, BP said. The company faced more than 390,000 claims from businesses such as seafood producers and tourism providers following the oil spill.
BP says some claims aren’t genuine. More than 99 percent of the cases have been reviewed, according to court documents, getting paid when they were determined to be valid.
BP’s stock fell about 3 percent to $42.46 on the New York Stock Exchange.