BP faces extra $60bn in legal costs as US loses patience with Gulf clean-up

[kpete]

Source: Guardian UK


BP faces extra $60bn in legal costs as US loses patience with Gulf clean-up

Government fines could send oil firm's bill soaring in wake of Deepwater Horizon disaster

The oil disaster unfolding in the Gulf of Mexico could present BP with much higher costs than previously thought as a result of US government penalties of up to $60bn (£40bn), according to City analysts.

The penalties are in addition to BP's already huge bill for the clean-up mission, which stood at $760m yesterday, and potentially unlimited damages payable by the company to fishermen and other affected local communities. BP also faces billions of dollars of lost earnings as a result of its damaged reputation in the US, which could result in it being barred from bidding for future contracts.

The Guardian has obtained a confidential briefing, from a top-level US environmental lawyer who specialises in oil industry litigation, to stockbroker Canaccord, assessing the financial impact of impending legal action on BP.

He warned that, under US law, BP is liable for $1,100 in civil penalties for each spilt barrel of oil and gas, to be paid to the US federal and affected state governments. If BP is found to have acted with gross negligence – and there is no evidence so far that it has – this fine would rise to $4,300 for each barrel.


Read more: http://www.guardian.co.uk/environment/2010/may/26/bp-extra-60bn-legal-costs