BP shares plunge to 13-year low on oil spill liabilities
BP's share price dived under 300 pence today for the first time for 13 years after the group said it had spent 2.35 billion dollars in response to the Gulf of Mexico oil spill crisis.business Updated: Jun 25, 2010 17:42 IST
BP's share price dived under 300 pence on Friday for the first time for 13 years after the group said it had spent 2.35 billion dollars in response to the Gulf of Mexico oil spill crisis.
The energy giant's stock collapsed by almost nine per cent in mid morning trading to hit a low point of 296 pence in trading on the London Stock Exchange, as investors fretted about spiralling costs.
"Many investors are capitulating as BP has gone from a solid dividend-paying cash cow to a high-risk punt," GFT analyst David Morrison said.
"It's under 300 pence for the first time in 13 years as it becomes impossible to have even the vaguest notion about what the company's liabilities may finally be."
Shares have collapsed by more than 50 per cent -- wiping billions of dollars off BP's stock market value -- since the Deepwater Horizon oil rig that it operated sank on April 22, two days after a blast killed 11 workers.
The accident sparked an enormous spill from a leaking well on the sea bed, with huge amounts of oil washing up on the US Gulf coastline, threatening precious wildlife and local communities.
"The cost of the response to date amounts to approximately 2.35 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said in a statement earlier on Friday.
The latest costs estimate, equivalent to 1.57 billion pounds, compared with a previous figure of two billion dollars that was given on Monday.