Jul 30 2013
BP chief Bob Dudley vowed to dig in for a long-haul legal battle as the company fights "absurd" compensation claims worth more than a billion US dollars in the wake of the Deepwater Horizon oil disaster.
Mr Dudley said he would stand up for shareholders against a flood of litigation after the company admitted that a vast trust fund it had set up to cover the bill was about to run out, leaving profits under pressure.
He would not rule out taking the case to the US Supreme Court and said BP would go after companies that were found to have been wrongly given pay-outs.
Mr Dudley said: "We are fighting this aggressively because we have a duty to our shareholders, but also because it's simply the right and principled thing to do. No company would agree to a settlement that pays businesses that suffered no losses.
"As we continue to fight these absurd outcomes, we want everyone to know that we are digging in and are well-prepared for the long haul on legal matters."
The British oil giant said it had put aside an extra 1.4 billion US dollars (£913 million) in compensation for individuals and businesses affected by the 2010 catastrophe, as it announced second quarter results for this year.
It admitted that during the current, third quarter the remaining 300 million US dollars (£196 million) in the trust would be fully used up, leaving additional amounts to be "charged to the income statement". Shares were down up to 5%.
The amount set aside for compensation payments has now risen from an original figure of 7.8 billion US dollars (£5.1 billion), to 8.2 billion US dollars (£5.3 billion), and now 9.6 billion US dollars (£6.3 billion). BP's total estimated bill following the disaster stands at 42.4 billion US dollars (£27.7 billion) - a sum which takes into account clean-up costs and fines.
The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing and tourism as well as marine and wildlife habitats, forcing the company to sign a multi-billion compensation deal in April 2012.
But it is now aggressively challenging the way claims are being handled by a court-appointed administrator and judge. BP's complaint centres on the way businesses are allowed to compare earnings before and after the spill in favourable ways which appear to inflate losses.