BP's spill costs look manageable 8 months later |
| The Associated Press - Dec 29, 2010 |
As the Gulf oil spill gushed out of control, BP's financial liabilities seemed big enough to sink the company. No more.
Cleanup, government fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has publicly estimated, according to an Associated Press analysis. But they'll be far below the highest estimates made over the summer by legal experts and prominent Wall Street banks, such as Goldman Sachs, which said costs could near $200 billion.
BP will survive the worst oil spill in U.S. history for several key reasons: it has little debt; its global businesses are forecast to generate $26 billion next year in cash flow from operations; the environmental impact of the spill isn't as bad as feared; and the government seems unlikely to ban BP from Gulf drilling. To bolster its finances, BP has cut its dividend, issued debt and sold more than $21 billion in assets.
"It could have been a lot worse," says Tyler Priest, a University of Houston petroleum historian who serves on President Obama's oil spill investigation committee. "BP is going to come back from this."
Read Full Article from The Associated Press
- Posted: 2010-12-29 12:41:05
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