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Business News

Oil spill costs BP $6bn so far

Oil giant BP today said the Gulf of Mexico disaster had cost it 9.5 billion US dollars (£6.1 billion) so far as it confirmed the leaking well had been stopped for good.

The group's outgoing chief executive Tony Hayward hailed the successful operation to kill the well as a "significant milestone" after a five-month battle that started when one of its deep-sea oil rigs exploded.

But he stressed the firm's clean-up efforts were not over yet as the region has yet to return to normal following the biggest oil spill in America's history.

Mr Hayward said: "This is a significant milestone in the response to the Deepwater Horizon tragedy and is the final step in a complex and unprecedented subsea operation - finally confirming that this well no longer presents a threat to the Gulf of Mexico."

He added: "There is still more to be done. BP's commitment to complete our work and restore the damage done to the Gulf of Mexico, the Gulf coast and the livelihoods of the people across the region remains unchanged."

Oil has not been flowing into the Gulf of Mexico since July 21, but BP said it had finally sealed the well permanently after pumping cement into the bottom and intercepting it with a relief well.

The company's shares rose 2% today, with its stock price clawing back some of the devastating falls seen after the leak erupted.

The Deepwater Horizon rig blew up on April 20, killing 11 workers. It is estimated that 206 million gallons of oil has spewed into the Gulf since the disaster.

BP's latest update on the cost of its response efforts cover the expenses involved in the well kill operation, as well as compensation for those impacted and clean-up measures, which have involved around 25,200 people, more than 2,600 vessels and dozens of aircraft.

But the firm has also set aside another 20 billion US dollars (£12.8 billion) for a compensation fund, while the eventual cost to its reputation and in lost work from the incident is still uncertain.

The oil spill led to the resignation of Mr Hayward and a moratorium on deepwater offshore drilling.

BP accepted it was partly at fault for the disaster in an internal report, admitting its workers misinterpreted a key pressure test of the well.

However, it also pointed the finger at its partners on the rig in what is expected to lead to a prolonged legal battle.