BP Puts a Price on Gulf Damage Control
Will $32.2 billion be enough to foot the bill for the tremendous mess the BP oil spill has made of the Gulf of Mexico? The higher-ups at the oil company seem to think so — at least for now.
In other BP news: As expected, CEO Tony Hayward will be vacating his current position in October, although the BBC reported Tuesday that he may wind up in a “non-executive director” job at the Russian outpost TNK-BP. –KA
Wait, before you go…
The $32.2bn cost of the clean-up includes the $20bn already set aside in an escrow account for compensation claims.
It is very difficult to describe a $17bn loss for three months of trading as a sparkling performance. But for BP it could have been a lot worse.
In an interview with the BBC’s business editor Robert Peston, BP chairman Carl-Henric Svanberg said there was no certainty the final bill for the spill would not be higher.
But he insisted that the company was in good financial shape, with strong cashflow.
“It’s of course a huge loss that overshadows everything else, but the underlying performance of the company is actually strong,” he told the BBC.
“There is no worry about our financial position and our ability to get through this. It’s of course a tragedy and it has large consequences, but we have no doubt that we will be able to rebuild the company,” he said.
Stripping out the oil spill costs, BP made a second quarter profit, on a replacement cost basis, of $5bn, compared with $2.9bn for the second quarter of 2009.
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