Cost of BP Spill Balloons to $40 Billion
BP announced today that it now expects the cost of the Gulf spill to be $7.7 billion more than it initially anticipated, bringing the total expense close to $40 billion. Back in July, when the Macondo well was still spewing oil into the Gulf of Mexico, BP set aside $32 billion to cover the cost of the cleanup. But due to a number of factors, that number has substantially ballooned:According to the Guardian, "The oil giant announced the new charge to cover the cost of the Gulf of Mexico spill alongside its financial results for the third quarter of the year. It blamed the delays that dogged its attempts to seal the leak, along with higher clean-up costs and legal fees."
$40 billion is a staggering number, to say the least, but in the end, it could still end up falling short of what's needed to properly cover the clean up and reparation costs. Here's the Guardian:
Richard Hunter, head of UK equities at Hargreaves Lansdown Stockbrokers, said the additional $7.7bn provision was "a stark reminder that the fallout from the spill will follow BP for some considerable time to come".To its credit, BP is still paying out claims, taking expanding cleanup costs into account, and signaling further intent to continue doing so -- for a while there, it looked as if the oil company was considering an attempt to weasel out of its agreement to cover all cleanup costs and limit its liability through the Oil Pollution Act of 1990. If it attempted to do so, it would seek to pay only $70 million total -- a tiny fraction of the damage it has wrought.
The final cost of one of the worst environmental disasters ever could climb further. BP said that the total charge of $39.9bn was its "current best estimate of those costs that can be reliably measured at this time".
And let's see how willing BP remains as cleanup costs continue to mount, as they're likely to do so for the foreseeable future.