Gulf of Mexico Oil Spill: BP Warns Costs Could Pass $18bn

British oil major BP has warned that the cost of the 2010 Gulf of Mexico oil spill could pass the $18bn mark.

BP said it could face additional lawsuits, lose business in the wake of the damage to its reputation, and miss out on opportunities as its legal expenses were pressurising its cash flow.

The US government could fine the oil giant up to $18bn (£10.8bn, €12.9bn) for its role in the Gulf of Mexico disaster. The spill killed 11 men and sent more than four million barrels of oil into the sea, causing billions of dollars of damage to American businesses and households.

The company's stock was trading 0.34% lower at 11:34GMT in London.

In its annual report published on 7 March, BP said that its "potential liabilities...cannot be fully estimated" and that it was impossible to establish what the final bill would be.

The firm said that it has only been able to provide "current best estimates of expenditures" but that there are "future expenditures for which it is not possible to measure our obligations reliably."

The annual report also revealed that BP chief executive Bob Dudley saw his pay triple in 2013, from $2.6m to $8.7m. Dudley was not in charge at the time of the US disaster.

The company stated that it had made "strong progress" under Dudley's leadership and that his remuneration was "directly dependent...on performance".

Spill Payments Appeal

Earlier in the week, BP said it was evaluating its options after a US federal appeals court rejected its attempts to prevent businesses from recovering money over the Gulf of Mexico oil spill even if they could not link their economic losses to the disaster.

BP said on 4 March that the US court's decision would "improperly allow for the payment of losses with no connection to the spill."

On 3 March, the 5th US Circuit Court of Appeals in New Orleans upheld, by a 2-1 vote, a 24 December ruling by US District Judge Carl Barbier in New Orleans, authorising the payments on so-called business economic loss claims.

The appeals court also said an injunction blocking payments should be lifted.

As of 3 March, about $3.84bn (£2.3bn, €2.8bn) had been paid out to 42,272 claimants, according to settlement administrator Patrick Juneau's claims website.