BP PLC said Friday that it would honor all “legitimate claims” for damages stemming from the Louisiana oil spill, as the company’s stock continued to fall amid investors’ concerns about potential litigation and a total clean-up bill that could run well into the billions of dollars.
The disaster was set in motion when the Deepwater Horizon, which had been leased by BP to drill a well in the Gulf of Mexico, caught fire and sank, killing 11 crew members. BP’s efforts to stop the flow of oil from the well have failed.
The company is spending about $6 million a day on the clean-up, but those costs are expected to escalate with the oil making landfall. Analyst estimates of BP’s total costs stemming from the disaster range from around $2.5 billion to $8 billion. BP says it is self-insured.
Neil McMahon, an oil analyst at Bernstein Research, estimated the potential cost to Louisiana’s fishing industry at $2.5 billion, and to Florida’s tourism sector of $3 billion. He said BP might be liable for $8 billion in total.
The Deepwater Horizon incident has drawn comparisons to the 1989 Exxon Valdez oil spill, which led to the release of about 260,000 barrels of crude into Alaska’s Prince William Sound. Exxon paid a total of about $3.5 billion for the Valdez clean-up, as well as for compensation, fines and settlements.
The Louisiana spill could be worse. The well is leaking at a rate of 5,000 barrels a day and it could take up to three months to drill a relief well that would shut off the flow, meaning the size of the spill could end up exceeding that of the Valdez.
If you or a family member has been injured because of the fault of someone else; by negligence, personal injury, slip and fall, car accident, medical malpractice, trucking accident, drunk driving, dangerous and defective drugs, bad product, toxic injury etc then please contact the Dallas Texas Personal Injury Attorney Dr. Shezad Malik. For a no obligation, free case analysis, please call 888-210-9693 or Contact Me Online.