TV News LIES

Monday, Sep 01st

Last update06:11:50 AM GMT

You are here News Environment Special report: How BP's oil spill costs could double

Special report: How BP's oil spill costs could double

E-mail Print PDF

BP oil spill costs may doubleLast month, BP increased by $8 billion the financial provisions it was taking for the Gulf of Mexico oil spill; the company's shares rose. Better-than- expected underlying profits and upbeat comments from new Chief Executive Bob Dudley were taken by the market as a sign the company had turned the corner and would soon return to pumping out steadily rising dividends.

Key to this sanguine outlook is confidence that the new estimate of the total cost of the spill -- $40 billion -- will be sufficient.

"We think that $40 billion adequately provisions for the liabilities that are outstanding so far," said Mark Lacey, Fund Manager at Investec Global Energy Fund. Paul Mumford, fund manager at Cavendish Asset Management, went further, saying the provision is likely to be overly conservative: "You might well find that you get provision write-backs," he said, hinting the bill could be lower.

That optimistic view may turn out to be true. BP executives have said this is their "best estimate" of costs, adding they could turn out lower. But history shows there is ample scope for nasty surprises from BP. The London-based oil giant -- last year it was the biggest non-state controlled oil and gas producer in the world -- has so far consistently underestimated the scope and potential cost of the Gulf spill.

It also has a track record of low-balling disasters, including the fatal Texas City refinery blast in 2005. Not only has the company underestimated the cost of repairing equipment and ecosystems in the past, it has also made overly optimistic assumptions about legal challenges.

That may be happening again.

More...


Most Recent Related Stories...


Pa. releases list of wells impacted by drilling

gas drillingAfter years of delays and confusion Pennsylvania has released details of 243 cases where regulators determined...

California lawmakers pass first U.S. plastic bag ban

plastic bag ban in CALawmakers are sending Gov. Jerry Brown a bill that would make California the first to impose...

Japan mercury poisoning survivors boost Canadian First Nation's compensation push

First Natio mercury caseMercury poisoning survivors and experts from Minamata, Japan — the site of one of the world’s...

Southwest U.S. could face 35-year 'megadrought'

southwest megadroughtMuch of the Southwest United States, the next century could feature a drought that lasts several...
 
America's # 1 Enemy
Tee Shirt
& Help Support TvNewsLIES.org!
TVNL Tee Shirt
 
TVNL TOTE BAG
Conserve our Planet
& Help Support TvNewsLIES.org!
 
Get your 9/11 & Media
Deception Dollars
& Help Support TvNewsLIES.org!
 
The Loaded Deck
The First & the Best!
The Media & Bush Admin Exposed!