Moody's says downgrades BP amid oil spill

5th May 2010, Comments 0 comments

Ratings agency Moody's lowered its outlook on BP's debt to "negative" from "stable" on Wednesday due to "considerable uncertainty" over the group's finances following the Gulf of Mexico oil spill.

"Moody's action reflects the considerable uncertainty associated with the financial liabilities and clean-up costs that BP may incur as a result of the oil spill," the agency said in a statement.

"Moody's notes the comprehensive response effort put in place by BP with the support of the US authorities and in cooperation with some of its industry peers.

"However, it remains impossible at this stage to assess the full extent of the costs and business impact of this accident on BP's results."

The British energy company said on Wednesday that it had sealed the smallest of three leaks gushing oil into the Gulf of Mexico, although the move would not alter the amount of crude spilling into the sea.

Two weeks after the Deepwater Horizon rig exploded, the full impact of the disaster is being realized as a massive slick looms off the US Gulf coast, threatening to wipe out the livelihoods of shoreline communities.

If estimates are correct, some 2.5 million gallons of crude have entered the sea since the BP-leased platform spectacularly sank on April 22, still ablaze more than two days after the initial blast that killed 11 workers.

Moody's said that it had "revised to negative from stable the outlook on the Aa1 senior unsecured ratings of BP plc and its guaranteed subsidiaries, and the Aa2 long term issuer ratings of BP Corporation North America Inc. and BP Finance plc".

© 2010 AFP

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