Following the oil spill in April 2010, BP is now faced with a fresh lawsuit for economic damages. Parties interested in getting compensation are many state and local governments in the South, with a demanded compensation of $34 billion.
BP representatives say that the company has set aside $42.2 billion so far and call the calculation method of these fresh claims "flawed." The company faces its final civil trial this month and are still hopeful for an out-of-court settlement. The latest financials show a 20% drop in profit for BP this quarter ($5 billion to $4 billion) due to a necessary sale of assets to pay damages ensuing from the disaster. CEO Bob Dudley remains optimistic about possible new ventures.
The company has already settled charged with the US Department of Justices and are yet to pay damages as ascertained by the Clean Water Act as well as the unquanitified natural resource damages.
http://www.guardian.co.uk/business/2013/feb/05/bp-deepwater-horizon-charge-rises
BP representatives say that the company has set aside $42.2 billion so far and call the calculation method of these fresh claims "flawed." The company faces its final civil trial this month and are still hopeful for an out-of-court settlement. The latest financials show a 20% drop in profit for BP this quarter ($5 billion to $4 billion) due to a necessary sale of assets to pay damages ensuing from the disaster. CEO Bob Dudley remains optimistic about possible new ventures.
The company has already settled charged with the US Department of Justices and are yet to pay damages as ascertained by the Clean Water Act as well as the unquanitified natural resource damages.
http://www.guardian.co.uk/business/2013/feb/05/bp-deepwater-horizon-charge-rises
3 comments:
http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill#Fisheries
Its hard to side with BP that the local governments are asking for too much money when you hear about the actual amount of damage caused by the oil spill that continued for 87 days in the gulf coast. Although their production has declined along with their profits, it just the consequences of the spill. Their inability to cap the oil spill in a reasonable amount of time caused serious economic damage to states such as Louisiana and Mississippi. Some of the main industries hurt were fishing and tourism businesses that relied on the gulf coast for money. It seems as if BP will be taking further economic losses on top of their original bill.
I agree with Rogers that the demands of state and local government of Louisiana and Mississippi are justified. Many industries were affected; however, it is difficult to determine which amount would be appropriate for BP to actually pay.
While I don't think that BP should be completely off the hook, I don't believe that they should be too harshly punished either. According to this other article, BP supports about 250,000 jobs and has invested $52 billion in the last five years. It would be just as devastating if this caused BP employees to lose their jobs.
http://www.cnn.com/2012/11/28/us/bp-suspension
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