BP’s Spill Bill: $3B and Counting

ADVERTISEMENT

BP announced yesterday that is has spent more than $3 billion on its ongoing oil spill relief efforts, $147 million of which has been used to settle 47,000 claims made by business owners. BP is estimated to have settled about half the claims made thus far by owners incurring property damage and/or business intrusion as a result of the ongoing spill, now in its 79th day. Scientists estimate that between 35,000 to 60,000 barrels are entering the Gulf each day.

This update came just before Texas attorney general Greg Abbott requested $25 million in funds from the oil giant to assist in his state’s clean-up efforts. Tarballs washed ashore in Texas over the weekend, meaning that now all of the five Gulf States have had oil reach their beaches.  

“We do know that BP will be held fully financially accountable for the costs incurred by the taxpayers when state and local governments engage in clean-up and response efforts,” Abbot said in a press release. “Equally important, BP will also be held responsible for the economic harm suffered by coastal businesses, fisherman, landowners, individuals and communities as a result of the Deepwater Horizon spill.”

Abbot said he was working with BP’s General Counsel Jack Lynch to ensure that Texas communities were compensated for the damages and subsequent relief efforts. A formal letter of request for the $25 million was sent to the company yesterday.

“We will of course take a look at their proposal and work with the state on any impacts associated with the spill from the Deepwater Horizon accident,’’ Daren Beaudo, a BP spokesman, told BusinessWeek in an email, following the request.  “Cleaning up oil spilled as a result of this incident is our responsibility.’’

BP, which has promised to make good on all legitimate claims filed by business owners, has entered into similar grant agreements with Alabama, Louisiana, Mississippi and Florida. Additionally, earlier this month, BP agreed to set up a $20 billion escrow fund to pay off future claims after the Obama administration expressed concerned that the oil company would run out of money before it could make full restitution for the damages.

These concerns have escalated over the last week when The New York Times revealed that BP asked partners the Andarko Petroleum Company and the Mitsui Oil Exploration Company of Japan for nearly $400 million in funding.  BP CEO Tony Hayward’s current visit to the Middle East caused further speculation that the company was looking for new investment partners to avoid a future takeover. However, BP maintains that they will not need to take on new investors to shoulder the costs of their spill.

In addition to the claims filed by small business owners, the oil company has received three bills thus far from the U.S. government, totaling $122.29 million.

Are there any other options for small biz owners affected by the oil spill? Check out this MainStreet article to find out how businesses insure against disaster.

—For the best rates on loans, bank accounts and credit cards, enter your ZIP code at BankingMyWay.com.

Show Comments

Back to Top