BP credit rating cut amid oil spill cost fears
Beleaguered oil giant BP came under more pressure today after its credit rating was cut amid fears over the soaring cost of the Gulf of Mexico disaster.
Concerns over the failure of repeated attempts to tackle the spill and the threat of a criminal investigation prompted ratings agency Fitch to cut the firm's credit rating from AA-plus to AA.
Moody's also cut its rating with warnings over the legal and financial burdens "likely to persist in the years to come".
The cuts will hurt BP because they raise the cost of its funding.
BP's shares recovered slightly today after two days of heavy falls, but since the Deepwater Horizon rig exploded and sank on April 20 - killing 11 workers - around a third of its value has been wiped out.
Moody's also expressed concern over the "mounting political pressure" on BP as US politicians lined up to attack the company.
Fitch added that the firm could suffer further downgrades if investment in new projects was diverted to tackle the crisis, and the clean-up bill exceeded its current worst-case scenario of around five billion US dollars (£3.4 billion) in any one year.
BP said earlier this week that the disaster had cost it 990 million dollars (£677 million) so far.
Its last "top kill" attempt to block the leaking oil well proved unsuccessful and the company is now working on using robot submarines in the latest move to stem the flow of oil.
But this technique has never been used before and it is far from certain that the procedure will work.
If it fails, the firm may be left with no other option than to rely on drilling relief wells that will take three months to complete.
Oil is spewing from the well at a rate of 12,000 to 19,000 barrels a day, meaning that between 18 and 40 million gallons has already been dumped into the Gulf, according to US government estimates.
BP has said it would pay 360 million dollars (£246 million) to fund six barrier "islands" to protect the Louisiana coastline.
- 1 Marijuana use by teenagers does not result in a lower IQ or worse exam results, study finds
- 2 Watch what happened when food critics were unknowingly served McDonald's
- 3 Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 NHS staff banned from drinking tea or coffee on the job because it looks like they're not working hard enough
Renee Zellweger on plastic surgery: 'I'm living a more fulfilling life and I'm thrilled that perhaps it shows'
Kim Jong-un 'purge': Six North Korea officials missing for weeks 'may have been executed'
Diwali: What is the festival of lights – and how is it celebrated around the world?
Nathan Cirillo: Final pictures emerge of soldier moments before he was shot dead by Ottowa gunman
Jimmy Carr's controversial Oscar Pistorius joke goes too far at the Q Awards
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Support for EU membership 'at highest level since 1991' with most Brits wanting to stay 'in'
Thousands with degenerative conditions classified as 'fit to work in future' – despite no possibility of improvement
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
iJobs Money & Business
£350 - £360 per day: Ashdown Group: SQL Developer with T-SQL, Watford, Hertfor...
120-150k: Accountancy Action: We are looking for an experienced CFO from a min...
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...