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
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night