BP has said it has drawn a line under the cost of the 2010 Deepwater Horizon disaster, taking an additional $5.2bn pre-tax charge that brings the company’s final bill for the disaster to $61.6bn.
The additional charges relate to extra costs under its 2012 settlement to compensate business and individuals that suffered losses as a result of the oil spill in the Gulf of Mexico, and further payments for some of about 85,000 claimants who sought damages but were not covered by that deal.
Much of the cost of the disaster can be written off against tax, leaving BP with an additional net charge of $2.5bn, to bring the post-tax total to $44bn.
Brian Gilvary, BP’s chief financial officer, said the company had “made significant progress” in resolving outstanding claims, and was now able to estimate “all the material liabilities remaining from the incident”.
He added that the move “provides our investors with certainty going forward”.
Until now, the provision made by BP in its accounts for the cost of the disaster has not included some items, including the full amount of the 2012 settlement. That was initially estimated at $7.8bn, but BP had not been able to specify a precise amount in its accounts because claims for business losses came in much higher than it had expected.
Transocean’s Deepwater Horizon drilling rig, working under contract for BP, was hit by an explosion and fire when oil and gas escaped from the well it had just finished drilling. The explosion killed 11 men and the well leaked more than 3m barrels of oil into the waters of the Gulf.
A US federal judge ruled in 2014 that BP had acted with “gross negligence” in its actions leading up to the accident.
The cost of the disaster is much higher than analysts initially expected while oil was still leaking into the Gulf of Mexico.
BP initially circulated estimates for the rate at which oil was flowing from the ruptured Macondo well that turned out to be much lower than those that were later judged to be accurate.
Analysts also underestimated the costs to BP of official penalties and damages, and of litigation by victims of the spill.