BP oil spill costs surge to eight billion dollars

3rd September 2010, Comments 0 comments

British oil giant BP revealed Friday that the devastating Gulf of Mexico oil spill disaster has cost it eight billion dollars (6.2 billions euros) so far -- with a sharp rise in payments in the last month.

"The cost of the response to date amounts to approximately eight billion dollars, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and federal costs," BP said in a statement on Friday.

The latest figure compared with the previous estimate of 6.1 billion dollars that was given last month.

The disastrous spill was triggered when an explosion ripped through the Deepwater Horizon rig in the Gulf of Mexico on April 20, killing 11 workers and sinking the huge offshore platform two days later. The flow of oil into the sea was not fully stemmed until July 15.

BP has already forecast that the worst environmental catastrophe in US history will cost the group a total of about 32.2 billion dollars, after pushing it into a record 16.9-billion-dollar loss in the second quarter.

The company repeated on Friday that it had agreed in June to set up a 20-billion-dollar compensation fund for residents affected by the spill.

BP added that operations were underway to replace the Deepwater Horizon's damaged blowout preventer (BOP) -- a large piece of equipment that failed to stop the disaster.

On Thursday, the group had removed the massive cap which had stemmed the flow of oil from its ruptured well deep in the Gulf of Mexico in a key step toward killing the well once and for all, officials said.

The damaged BOP will be raised to the surface to be examined and held as evidence in an official investigation, following the removal of the cap.

The ruptured Macondo well was plugged with heavy drilling fluid and then sealed it with cement last month, but the so-called "bottom kill" operation to permanently seal the well was delayed until the blowout preventer is replaced.

The "bottom kill" involves intercepting the crippled well with a relief well, which then pumps heavy drilling oil and cement into the oil well to permanently plug it.

BP said Friday that it hopes the relief well will reach the damaged well by around mid-September, depending on weather conditions.

In late morning trade on Friday, the company's shares rose 0.51 percent to 394.60 pence.

However, BP's share price has collapsed as a result of the disaster, shedding about 40 percent in value since the explosion on April 20.

The catastrophe also sparked the resignation of BP chief executive Tony Hayward in July

Hayward was forced out following a string of gaffes as the public face of the firm in its battle to stop oil leaking into the Gulf of Mexico.


© 2010 AFP

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