LONDON (Reuters) - Oil giant BP said it plans to offset the entire cost of its Gulf of Mexico oil spill against its tax bill, reducing future contributions to U.S. tax coffers by almost $10 billion.
BP took a pretax provision of $32.2 billion in its accounts for the period, for the cost of capping the well, cleaning up the spill, compensating victims and paying government fines.
However, the net impact on BP’s bottom line will only be $22 billion, with the company recording a $10 billion tax credit, most of which will be borne by the U.S. taxpayer, a spokesman said.
BP’s UK tax bill will also be reduced, BP added.
Analysts said BP could prompt more public and political anger in the United States by deducting all the costs, and especially the expected fines BP will face.
In 2006, Boeing Co decided to forego seeking a tax deduction for any of a $615 million settlement with the government in 2006 over ethics charges, under pressure from lawmakers.
Reporting by Tom Bergin; editing by Simon Jessop