BP's stock holders wait for final bill on Gulf spill
BP shareholders will look for signs of whether the oil giant plans to increase the money set aside to cover the Gulf of Mexico disaster when it reports half-year figures on Tuesday.
BP is expected to report a 9 per cent fall in profit to about $7.7bn (£5bn) for the six months to the end of June, down from $8.5bn a year earlier, according to consensus analyst forecasts.
The decline has come after the average price of oil fell about 5 per cent in the first six months of the year, compared with the same period last year, while revenue will also be down as a result of disposals. These sales were prompted by the need to finance tens of billions of dollars of costs arising from the Deepwater Horizon disaster in 2010, which resulted in 11 deaths.
The biggest sale was of BP's 50 per cent stake in its troublesome, yet highly profitable, TNK-BP joint venture in Russia. This stopped contributing to the bottom line when the disposal was completed on 21 March.
"The main thing people are going to want to know is, are they going to have to provision more for the Gulf of Mexico settlement?" said Andrew Whittock, an analyst at Liberum Capital. BP has budgeted for about $43bn in legal, clean-up and other costs.
However, the bill could soar by up to $50bn more, in a worst-case scenario that would include BP being found grossly negligent in a long-running court case in Louisiana, rather than just negligent. If it is, the maximum penalty under the Clean Water Act alone could rise from $4.5bn to about $21bn.
Last week, Halliburton, which was the cement contractor on the rig, said it would plead guilty to destroying evidence relating to the spill. The Houston-based group was originally accused of this by BP.
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies