BP says oil spill cost $350 million so far

Analysts expect final bill to run to tens of billions of dollars

Published May 10, 2010 12:04PM (EDT)

BP PLC said Monday that the Gulf of Mexico oil spill has cost the company $350 million so far as it outlined renewed efforts to contain the leak.

BP said the tally included the cost of the immediate response, containment, relief well drilling, commitments to the Gulf Coast states, and settlements and federal costs.

The company did not speculate on the final bill, which most analysts expect to run into tens of billions of dollars.

BP shares slipped 0.5 percent to 551.4 pence ($8.26) after the report, bucking an upward trend across the rest of the London Stock Exchange.

The London-based company said that it was preparing a second, smaller containment box to lower over the main leak point at the Deepwater Horizon drilling rig after attempts to do the same with a larger box last week were foiled by icy slush.

BP said the smaller dome was designed to mitigate the formation of the "large hydrate volumes" that clogged the bigger dome.

However, it acknowledged that the maneuver, which is designed to siphon up to 85 percent of the leaking oil to a tanker at the surface, had never been done before in more than 5,000 feet (1,525 meters) of water. The blown-out well, which is gushing at least 200,000 gallons (750,000 liters) of crude each day, is a mile (two kilometers) underwater.

BP added that further work on the well's blow out preventer, the device that was supposed to shut off the flow of oil after a deadly April 20 oil rig explosion but failed, meant the company was in a position to attempt a "top kill" to stop the flow of oil. That technique involves shooting mud and concrete directly into the blow out preventer.

The company said that work on the first relief well, which is considered a permanent fix and began a week ago, continues and is expected to take three months to complete.

"All of the techniques being attempted or evaluated to contain the flow of oil on the seabed involve significant uncertainties because they have not been tested in these conditions before," the company said in a statement.

"BP continues to do everything it can, in conjunction with governmental authorities and other industry experts, to find a solution to stem the flow of oil on the seabed," it added.

An estimated 3.5 million gallons (13.25 million liters) of oil have spilled since the explosion at the Deepwater rig, about 50 miles (80 kilometers) off the Louisiana coast. At that pace, the spill would surpass the 11 million gallons (42 million liters) spilled in the Exxon Valdez disaster by next month.


By Jane Wardell

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