BP battles for billions in new Gulf trial phase
By Terry Wade and Andrew Callus
HOUSTON/LONDON (Reuters) - BP will battle to hold down fines that could hit $18 billion in a new phase of the Gulf of Mexico trial that will rule on how much oil it spilled in 2010 and judge its efforts to plug its well.
Starting on Monday in New Orleans, this second of three phases of a trial determining responsibilities for the worst marine pollution ever seen in the United States, could - in the worst outcome for the British firm - land BP with a bill five times greater than the $3.5 billion it has set aside for fines.
Its annualized earnings, based on last quarter, are running at about $17 billion.
A first phase, which wrapped up in April, looked at dividing blame among BP and its contractors, Transocean Ltd and Halliburton Co, for the 2010 Macondo disaster which left 11 men dead and huge stretches of sea and coast fouled with oil.
Expected to last a month, this second part of the process will be crucial for shareholders in estimating some of the extra cash BP could end up paying out beyond the $42.4 billion it has so far made provision for in its accounts to cover the clean-up, compensation and fines.
U.S. District Court Judge Carl Barbier, renowned for setting a fast pace, is expected to announce his findings and penalties after a third phase of the trial, likely next year.
Much depends on how the court rules on a dispute between BP and the U.S. government over how many million barrels of oil were actually spilled, and on just how culpable BP was in failing to stop it for 87 days.
BP shares have lost a third of their value since the disaster, as the company hived off $39 billion of assets that generated $5 billion a year in cashflow - or about a fifth of its earning power - before 2010. Continued...