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.
That's some guestlist! Stunning images show huge dynastic wedding between Ultra-Orthodox Jewish families which attracted 25,000 guests
Breaking: Soldier killed in Woolwich machete attack named as Drummer Lee Rigby
'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
World news in pictures
Ingrid Loyau-Kennett, the mother-of-two hailed as a hero for confronting Woolwich attackers, thought: 'better me than a child'
- 1 Breaking: Soldier killed in Woolwich machete attack named as Drummer Lee Rigby
- 2 'Sickening, deluded and unforgivable': Horrific attack brings terror to London’s streets
- 3 Grace Dent: I’m not sure how these people can avoid being called ‘bigots’. And the more ‘civilised’, the worse they are
- 4 Woolwich murder: They killed, then they performed - these men should be starved of our attention
- 5 Woolwich attack: The EDL will seek to exploit this evil crime for their own evil ends
BMF is the UK’s biggest and best loved outdoor fitness classes
Find out what The Independent's resident travel expert has to say about one of the most beautiful small cities in the world
Nook is donating eReaders to volunteers at high-need schools and participating in exclusive events throughout the campaign.
Get the latest on The Evening Standard's campaign to get London's children reading.
Win anything from gadgets to five-star holidays on our competitions and offers page.