BP still feeling heat from Gulf explosion as profits plunge
Nearly three years on, the Gulf of Mexico oil spill continues to dominate BP’s agenda.
The FTSE 100 oil giant today announced a 19% drop in its 2012 profits to $17.6 billion (£11.2 billion) as it took a further $4.1 billion charge in the fourth quarter relating to the explosion on the Horizon rig in April 2010.
The blast resulted in 11 deaths and spilled an estimated five million barrels of oil into the Gulf.
The charge dealt a further blow to BP’s bottom line, which was already suffering from a decline in production after the company sold a wide range of businesses to finance compensation claims.
These include BP’s 50% stake in its troubled Russian oil joint venture TNK-BP to Rosneft for $28 billion in cash and shares and the Carson oil refinery in California.
BP said it had divested $37.8 billion of businesses since 2010, excluding the TNK-BP deal, which is expected to be formally completed in the first half of the year.
It has taken a cumulative net charge for the Gulf of Mexico of $42.2 billion, with the latest charge mostly related to a recent out-of-court settlement that resolves all federal criminal charges stemming from the incident.
BP chief executive Bob Dudley sought to draw a line under the incident today, acknowledging that times have been tough lately but insisting that the company was in good shape.
“We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects. This lays a solid foundation for growth into the long term,” he said.
BP is preparing to face its biggest case over the spill this month.
If it goes ahead, the case will determine how much oil was spilt, who is to blame for the incident and whether BP was negligent or grossly negligent. If BP is found to have been negligent, it could be liable for a maximum penalty of $4.5 billion from the Clean Water act alone. If grossly negligent, that could soar to $21 billion.
Fourth-quarter profits fell by a fifth to $4 billion. There is a 10% rise in the full-year dividend to 16.67p a share.
- 1 Fifty Shades of Grey trailer: First look at Jamie Dornan as Christian Grey
- 2 Is Gideon Levy the most hated man in Israel or just the most heroic?
- 3 50 books for students to read this summer: From Ernest Hemingway to Gillian Flynn
- 4 Students offered grants if they tweet pro-Israeli propaganda
- 5 Rebecca Hall on her film career so far: ‘I’ve played too many repressed neurotics’
Israel-Gaza conflict: Israeli targeting policy under scrutiny after shellfire hits a mother and child, a school full of refugees and a doctor’s home
Peaches Geldof: Her final day – and her fatal decision
Students offered grants if they tweet pro-Israeli propaganda
Iraq crisis: Isis orders Mosul shop keepers to cover mannequins
Israel-Gaza conflict: Israel may have committed war crimes, says UN human rights chief
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Arizona execution lasts two hours as killer Joseph Wood left 'snorting and gasping' for air
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£300 - £350 per day: Orgtel: Job Title: Business Analyst Rate: £300 - £350 per...
£60000 per annum: Harrington Starr: Trade Desk Specialist (Linux, Windows, FIX...
£40000 - £60000 per annum + BONUS + BENEFITS: Harrington Starr: CXL, Triple Po...
£70000 - £90000 per annum + Job Satisfaction: Harrington Starr: Project Manage...