BP Puts Gulf Oil Disaster Cost at $19 Billion So Far

March 30, 2011

BP Plc has so far spent $19 billion on last year’s disastrous Gulf of Mexico oil spill and believes the uncertainty over the ultimate total has decreased, a company executive said Tuesday.

BP, operator of the Macondo well, which ruptured in April 2010 and killed 11 workers, has taken a $41 billion charge to cover costs related to the accident, including a $20 billion fund to compensate those hurt or otherwise affected by the spill.

“We’ve spent $19 billion so far,” Lamar McKay, president of BP America, told investors at the Howard Weil Energy Conference in New Orleans, when asked how certain the company could be about the costs. “The range of uncertainty is narrowing on that because we’re midway through that process.”

McKay did not discuss a report earlier on Tuesday that the company’s managers could face U.S. manslaughter charges because of the spill.

As for plans to sell $30 billion in assets to help pay spill damages, he said BP had already signed deals to sell $22 billion to $23 billion of oil and gas properties. “We’ve got sales in the pipeline that are either announced or to be announced that will get us to the $30 billion,” he said.

Asked about its strategic alliance with Rosneft, which that was blocked by the British company’s partners in joint venture TNK-BP, McKay said Russia was a “complicated” place to do business and he expected more permutations to come on that deal.

“It has to play out over a period of time, and somewhat unfortunately it plays out in a public venue rather than a private venue,” he said.

He added that BP’s history in Russia was long, and that the TNK-BP investment had already returned its original $8 billion investment, as well as $6 billion more.

(Reporting by Anna Driver and Braden Reddall in New Orleans; Editing by Gunna Dickson and Steve Orlofsky)

Was this article valuable?

Here are more articles you may enjoy.