Costs of Gulf oil spill are rising for BP, but company has deep pocketsBy AP
Thursday, June 17, 2010
BP’s got money aplenty for huge Gulf spill bill
Cleanup, fines and lawsuits stemming from the Gulf of Mexico oil spill are likely to cost BP tens of billions of dollars. Yet many investment analysts say the British oil giant can survive the crisis. Here’s a look at some of the costs BP faces, and a snapshot of its finances.
BP’S COSTS ADD UP:
— It’s already paid $1.8 billion.
— Cleanup tab could hit $20 billion, assuming worst-case spill estimates.
— If BP is found “negligent” under federal law, fines quadruple to $4,300 per barrel spilled, adding perhaps $20 billion to the bill.
— BP agreed to put $20 billion into a fund to pay fisherman and other workers who’ve lost money.
— Court cases could add tens of billions to cost, especially if criminal charges are filed.
BUT ITS FINANCES ARE STRONG:
— Strong cash flow from operations, estimated at $30 billion for 2010.
— Suspending dividend, tapping cash and selling assets frees up $25 billion this year.
— It could tap $10 billion in debt already lined up with banks.
— Because it has borrowed little so far, BP can easily hit up lenders for another $15 billion.