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.
Liam Neeson's Downton dreams
Thriller is set in the secret world of British espionage
Bomber jacket worn by Mary Berry sells out within an hour
- 1 Thailand beach murders: Thai PM suggests 'attractive' female tourists cannot expect to be safe wearing bikinis
- 2 Scottish independence: What you shouldn't tweet about if you want to avoid jail today
- 3 Scottish independence: Five reasons Salmond is secretly hoping for a 'No' vote
- 4 Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
- 5 Archbishop of Canterbury admits doubts about existence of God
Scottish independence referendum live: Clackmannanshire blazes the trail as 54% vote No while Yes trails with 46%
Scottish independence: Final opinion polls show undecided voters could swing result either way
Isis plan to 'behead random member of the public' in Sydney thwarted by Australian police
Scottish independence: Andy Murray backs Yes campaign in eleventh hour decision
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Portuguese academic says British are 'filthy, violent and drunk'
iJobs Money & Business
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...
To £85,000 + banking benefits: Saxton Leigh: You will be expected to carry out...
Up to £90,000 + benefits: Saxton Leigh: Credit Risk Audit Manager required to ...