BP must not be destroyed, says Cameron as shares hit 14-year low

BP's share price plunged to a 14-year low yesterday as the battered oil giant admitted that the Deepwater Horizon disaster in the Gulf of Mexico had cost it $2.35bn (£1.57bn) so far.

The company's situation has deteriorated to such an extent that David Cameron was moved to issue his strongest statement yet on the disaster, saying yesterday that there must be clarity over the costs BP will incur from the spill to avoid its "destruction". "It is...in all our long-term interests that there is some clarity, some finality, to all of this, so that we don't...see the destruction of a company that is important for all our interests," the Prime Minister told the Canadian broadcaster CBC from the G8 summit in Ontario.

Mr Cameron said he still believed the matter called for gentle persuasion, brushing aside charges the issue was affecting Anglo-US relations.

"This isn't an issue between Britain and America. This is about BP doing what it should but also being treated in a way that enables it to go forward," he told reporters earlier.

"BP wants to cap the oil, it wants to clean up the oil, it wants to pay compensation to fishermen and hotel owners and people who have suffered and it should do that," he said. "It is in both Britain and America's interests that BP remains a strong and stable company."

BP's stock recovered slightly to close 6 per cent lower at 304.6p after plummeting by more than 8 per cent in early trading. Even after the recovery, BP's shares are still 54 per cent lower than they were before the explosion on 20 April killed 11 people and triggered a leak a mile down on the sea floor that is still only partially contained.

BP said the £2.35bn costs incurred to date include efforts to stem the spill and clean up the oil, as well as grants to US states along the Gulf coast, federal costs and claims paid. Nearly 74,000 claims have been filed, and more than 39,000 payments totalling nearly $126m have been made. So far, the costs are still manageable for a company which generated $30bn in cash over the past four quarters. Tony Hayward, the embattled chief executive, reassured British staff this week that the company's health had stabilised and it had moved into the "intensive care" ward.

But with no clear picture of what the final bill may be, BP's finances are under a spotlight and the market is awash with speculation about possible fund-raising plans. Under pressure from President Barack Obama, the company agreed last week to set up a $20bn fund to cover claims arising from the spill, as well as suspending dividend payments for the rest of the year and slashing capital expenditure.

The broken oil well is estimated to be pumping between 35,000 and 60,000 barrels of crude into the sea each day. Although Tropical Storm Alex now looks unlikely to reach the Gulf, the storm still heralds the start of the hurricane season. And a major storm will require all containment systems to be disconnected from their storage ships.

BP is in a race against time, according to Malcolm Graham-Wood at Westhouse Securities. The company has assets worth about $130bn but shares valued at only $50bn. "All the fundamentals point to BP being oversold," said Mr Graham-Wood. "But the risks here are still very high and it could easily get worse before it gets better. If we get a hurricane through there all bets are off."

Start your day with The Independent, sign up for daily news emails
News
The cartoon depicts the UK (far left) walking around a Syrian child refugee
newsIn an exclusive artwork for The Independent, Ali Ferzat attacks Britain's lack of 'humanity'
Life and Style
Man taking selfie in front of car
health
Sport
footballManager attacks Sky Sports pundit Jamie Redknapp after criticism of Diego Costa's apparent stamping
Life and Style
food + drink
PROMOTED VIDEO
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Web Developer - PHP

£16500 - £16640 per annum: Recruitment Genius: This fast growing Finance compa...

Ashdown Group: Client Services Manager - Relationship Management - London

£30000 - £32000 per annum + benefits : Ashdown Group: A highly successful, int...

Recruitment Genius: Credit Controller / Customer Service

£18000 - £20000 per annum: Recruitment Genius: This rapidly expanding business...

Guru Careers: In-House / Internal Recruiter

£25 - 28k + Bonus: Guru Careers: An In-house / Internal Recruiter is needed to...

Day In a Page

Greece elections: In times like these, the EU has far more dangerous adversaries than Syriza

Greece elections

In times like these, the EU has far more dangerous adversaries than Syriza, says Patrick Cockburn
Holocaust Memorial Day: Nazi victims remembered as spectre of prejudice reappears

Holocaust Memorial Day

Nazi victims remembered as spectre of prejudice reappears over Europe
Fortitude and the Arctic attraction: Our fascination with the last great wilderness

Magnetic north

The Arctic has always exerted a pull, from Greek myth to new thriller Fortitude. Gerard Gilbert considers what's behind our fascination with the last great wilderness
Homeless Veterans appeal: Homeless in Wales can find inspiration from Daniel’s story

Homeless Veterans appeal

Homeless in Wales can find inspiration from Daniel’s story
Front National family feud? Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks

Front National family feud?

Marine Le Pen and her relatives clash over French far-right party's response to Paris terror attacks
Pot of gold: tasting the world’s most expensive tea

Pot of gold

Tasting the world’s most expensive tea
10 best wildlife-watching experiences: From hen harriers to porpoises

From hen harriers to porpoises: 10 best wildlife-watching experiences

While many of Britain's birds have flown south for the winter, it's still a great time to get outside for a spot of twitching
Nick Easter: 'I don’t want just to hold tackle bags, I want to be out there'

'I don’t want just to hold tackle bags, I want to be out there'

Nick Easter targeting World Cup place after England recall
DSK, Dodo the Pimp, and the Carlton Hotel

The inside track on France's trial of the year

Dominique Strauss-Kahn, Dodo the Pimp, and the Carlton Hotel:
As provocative now as they ever were

Sarah Kane season

Why her plays are as provocative now as when they were written
Murder of Japanese hostage has grim echoes of a killing in Iraq 11 years ago

Murder of Japanese hostage has grim echoes of another killing

Japanese mood was against what was seen as irresponsible trips to a vicious war zone
Syria crisis: Celebrities call on David Cameron to take more refugees as one young mother tells of torture by Assad regime

Celebrities call on David Cameron to take more Syrian refugees

One young mother tells of torture by Assad regime
The enemy within: People who hear voices in their heads are being encouraged to talk back – with promising results

The enemy within

People who hear voices in their heads are being encouraged to talk back
'In Auschwitz you got used to anything'

'In Auschwitz you got used to anything'

Survivors of the Nazi concentration camp remember its horror, 70 years on
Autumn/winter menswear 2015: The uniforms that make up modern life come to the fore

Autumn/winter menswear 2015

The uniforms that make up modern life come to the fore