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BP incurs $3.5 bn expenses in fighting oil spill

Source: PTI
July 12, 2010 18:20 IST
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Battling one of the worst oil spills in decades, British energy major BP Plc has so far shelled out $3.5 billion towards containing the disaster.

The estimate has been revised upwards, a week after the beleaguered entity pegged costs at $3.12 billion.

"The cost of response to date amounts to approximately $3.5 billion.

"As of July 10, almost 1,05,000 claims have been submitted and more than 52,000 payments have been made, totalling almost $165 million," BP said on Monday.

The total of $3.5 billion includes expenses related to the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs.

Indicating that the oil spill could drain more money in the coming weeks, BP has reiterated that it is too early to quantify other potential costs and liabilities associated with the incident.

"Approximately 46,000 personnel, more than 6,400 vessels and dozens of aircraft are engaged in the response effort," BP said in a statement.

Going by reports, BP is making some progress in plugging the oil well in the Gulf of Mexico, which is estimated to be leaking over 50,000 barrels of oil into the sea every day.

"Plans also are being developed for additional containment capacity and flexibility that will ultimately increase capacity to 60,000-80,000 barrels per day.

"These projects are currently anticipated to begin operations towards the end of July," it added.

In the wake of intense pressure from the Barack Obama administration, BP last month unveiled a $20 billion-fund that would be utilised to meet certain obligations arising out of the oil and gas spill.

The spill was caused in April by a blast in the Deepwater Horizon rig in the Gulf of Mexico and the disaster also claimed 11 lives.

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