BP has rattled investors by increasing its provision for compensation claims arising from the Deepwater oil spill of 2010. The amount set aside for payouts to private-sector plaintiffs was increased from $7.8bn to $9.6bn in the second quarter. The ultimate cost of the settlement would be "significantly higher", warned the oil giant, because many claims have yet to be received and processed. Claims can be made until next April.
BP continues to fight the claims administrator's interpretation of the compensation settlement in court, as it thinks it is too generous and has given rise to "fictitious" claims. The $20bn overall compensation fund is almost gone now, and future claims will hit profits. Meanwhile, the group's second-quarter profits of $2.7bn were 33% down on a year ago, due to a fall in oil prices and a low rouble, which dented its Russian earnings.
What the commentators said
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