Saturday, July 21, 2018
Business

Six years after gulf oil spill, BP has gushed an average $25.5 million a day to cover disaster

Remember the disastrous BP oil spill in the Gulf of Mexico? BP sure hasn't forgotten, given that by this month's six-year anniversary, the giant oil-exploration company has paid out $56 billion in costs related to the spill.

That's $25.5 million spent on average every day by BP since the spill in April 2010. And it's not over yet.

The additional expenses looming aren't BP's only concern. By this fall, the entire oil spill nightmare will be reintroduced to the public, thanks to a Hollywood movie titled Deepwater Horizon starring Mark Wahlberg and Kate Hudson about what is billed as the biggest offshore oil spill in U.S. history and worst environmental disaster so far of the 21st century.

As if Floridians need to be reminded of the cost, pain and ongoing gulf consequences of the spill. BP's Macondo well exploded on April 20, 2010, killing 11 workers and releasing more than 3 million barrels of oil into the Gulf of Mexico over 87 days.

BP marked one financial plateau last year when it reached a $20 billion agreement resolving state and federal claims. Yet other legal claims remain.

Those expenses were spotlighted this week when BP announced a quarterly loss of $485 million, sparked by an unexpected $917 million writedown by the company related to the oil spill. Still, the financial performance was actually better than analysts had expected and BP shares rose in response, closing at $33.60.

Before the spill, BP's stock traded near $60, then fell below $30 in June 2010, once the severity of the spill began to be realized. After peaking at $52 in mid 2014, BP shares have trickled south and now trade in the low $30s.

BP on Tuesday told shareholders it could not guess how much more costs would rise due to the oil spill. "It's impossible to come up with a best estimate," BP chief financial officer Brian Gilvary told analysts.

Recent reports on the environmental impact from the oil spill six years later continue to indicate widespread damage to animal and sea life. A report by the conservation and advocacy group Oceana found far more coastline was affected by the spill than experts first anticipated. Scientists from the National Oceanic and Atmospheric Administration and private research companies recently reported finding oil along more than 1,300 miles of shoreline (out of 5,930 miles surveyed) after the spill. The area stretches from Texas to Florida.

Those findings underpin an assessment of oil spill damage published by the federal government earlier this year. "Unprecedented in both scope and nature, the Deepwater Horizon oil spill was the largest offshore oil spill in U.S. history," the report stated. "The spill dealt a heavy blow to the Gulf Coast region natural resources and its natural resource-dependent economy."

For BP, writing more and bigger checks to deal with the spill is not over.

In 2012, BP set aside $7.8 billion to cover a settlement with Gulf Coast businesses and residents. The company said Tuesday that sum had increased to $12.9 billion, including $600 million in the first quarter of the year as the company began accelerating its claims process.

Contact Robert Trigaux at [email protected] Follow @venturetampabay.

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