BP spill costs up to $2.65B; denies CEO resigning
Published 7:25 pm Monday, June 28, 2010
BP’s mounting costs for capping and cleaning up the Gulf of Mexico spill have reached $2.65 billion, the oil giant said Monday, but the company denied reports out of Russia that CEO Tony Hayward is resigning.
The company’s expenses climbed $100 million per day over the weekend, according to an SEC filing Monday, as engineers eyed a tropical storm heading toward Mexico that was expected to miss the oil spill area but could still generate disruptive waves and winds.
It was a rocky start to the week after BP PLC stock fall 6 percent Friday in New York to a 14-year low. BP has lost more than $100 billion in market value since the deep-water drilling platform it was operating blew up April 20, killing 11 workers and starting the massive leak that has fouled the coastline in four states.
BP shares gave up some ground in London after the Hayward report emerged from Russia. But they were still up a fraction at 306.75 pence ($4.62) . BP’s U.S. shares gained about 2 percent in premarket trading.
British-based BP rushed to deny the report by Russia’s state RIA Novosti news agency that a senior Russian Cabinet official had said Hayward was expected to resign as chief executive.
It quoted Deputy Prime Minister Igor Sechin, who was set to meet Hayward on Monday, as saying that Hayward would introduce his successor.
“Hayward is leaving his post, he will introduce his successor,” Sechin was quoted as saying by RIA Novosti.
BP spokeswoman Carolyn Copland in London said the report “is definitely not correct.” Sheila Williams, also in London, said, “Tony Hayward remains chief executive.”
“They are mistaken,” U.S.-based BP spokesman Mark Proegler said of the Russian report.
Hayward was to assure Russian officials of BP’s viability and discuss issues related to Russian joint venture TNK-BP, which accounts for about a quarter of BP’s reserves and production.
Moscow-based oil analyst Konstantin Cherepanov from the Swiss investment bank UBS said he gave little credence to reports of Hayward’s resignation.
“I’m sure there has been a misunderstanding. Hayward’s resignation at this time and in this place lacks logic,” he said.
“It would make sense that Hayward would finish his job tackling with the oil spill and step down afterwards so that the new CEO wouldn’t have his burden on his shoulders.”
In a filing Monday to U.S. securities regulators, BP said the cost of its response to the Gulf of Mexico oil spill had reached about $2.65 billion, up from $2.35 billion as of Friday. The costs include spill response, containment, relief well drilling, grants to Gulf states, claims paid, and federal costs.
BP said it had received more than 80,000 claims and made almost 41,000 payments, totaling more than $128 million.
BP says the figure does not include a $20 billion fund for Gulf damages it created this month.
In the Gulf, Tropical Storm Alex was forecast to strengthen and possibly become a hurricane Monday or Tuesday as its center crossed open water from Yucatan to Mexico’s northeastern coast.
That track is far from the area of the oil spill off Louisiana’s coast. But the first tropical storm of what is expected to be an active Atlantic hurricane season will still generate waves up to 15 feet high and winds of 20 to 30 mph on its outer edges that could pound the oil spill area, said Stacy Stewart, senior hurricane specialist at the National Hurricane Center in Miami.
“That could exacerbate the problem there in terms of pushing oil further inland and also perhaps hindering operations,” Stewart said.