BP to pay higher-than-expected £2.1bn of Deepwater Horizon claims in 2018

16 January 2018

BP expects to pay out a higher-than-expected $3bn (£2.2bn) in compensation relating to the Deepwater Horizon disaster this year but said the class action scheme set up to handle claims was now “winding down”.

The oil giant’s Deepwater Horizon rig exploded in 2010, killing 11 people and causing massive pollution in the Gulf of Mexico. It has cost the company tens of billions of dollars in compensation and other costs.

BP now expects to book a post-tax non-operating charge of $1.7bn in its fourth quarter following “significantly higher claims” through its court-supervised settlement programme and an unfavourable legal ruling, bumping its annual expected payouts up 50pc from $2bn.

Despite the higher bills BP has not changed its financial guidance for the year as the charges are covered by its existing financial projections.

Brian Gilvary, BP's chief financial officer, said: "With the claims facility's work very nearly done, we now have better visibility into the remaining liability.

“The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at $50 per barrel."

Oil companies have been boosted by a rally in the price of crude oil, which is now hovering at around $70 a barrel, lifting the amount of cash they make from each shipment. 

Earlier this month BP said it expected to pay a $1.5bn charge on the back of recent US tax reforms, though it anticipates the changes to be positive in the long run.

Originally published at telegraph.co.uk

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