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BP's Gulf spill payment problem

Thursday, May 16, 2013 - 01:46

May 16 - British oil company BP reportedly wants Prime Minister David Cameron to intervene with the U.S. government over the escalating costs of compensation for the Gulf of Mexico oil disaster, calling some of the claims ''fictitious'' and ''absurd''. Hayley Platt asks how serious a financial crisis could this be for the company and how vulnerable are they to a takeover?

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They set aside more than $8 billion to compensate victims of the Deepwater Horizon oil disaster. But, according to the BBC, BP fears that might not be enough. More and more claims are coming in, they say and many are reportedly "fictitious" and "absurd". BP has not commented but the oil giant's financial recovery is apparently at stake. And there's even a suggestion BP wants Britain's PM to raise the issue with the U.S. government. Kevin Allison from Reuters Breaking Views says, if confirmed, it suggests desperation on the company's part. It recently failed to win a legal challenge against a settlement they'd originally agreed. SOUNDBITE: Kevin Allison, Reuters Breaking Views, saying (English): "It seems like a little bit of a last ditch move to try an exert some influence and again in context of the U.S. legal system it's not clear even if they had gone to Cameron to ask for help exactly what impact that could have." The 2010 disaster killed 11 rig workers and caused the biggest oil slick in U.S. history. Last year BP settled around 100,000 claims. The report suggests the company fears any increase could make it more vulnerable to takeover. SOUNDBITE: "It's highly unlikely that it proves a decisive factor in BP's finances, the ability to pay its dividend or the fact that it may be a takeover target. The Macondo spillage generally has created this question mark over BP's future but the dividend for now looks safe and it doesn't feel like it's an existential crisis for BP." BP is still facing a civil lawsuit by more than 2,000 private businesses and individuals. A trial in the U.S. has been set for August 2014.

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BP's Gulf spill payment problem

Thursday, May 16, 2013 - 01:46