AT A GLANCE: BP Plans To Capture All Oil; US Calls For Independent Fund

14th Jun 2010 18:12

THE NEWS: BP PLC (BP, BP.LN), under pressure from U.S. authorities, outlined a plan to capture all the oil its damaged well is spewing into the Gulf of Mexico by the end of June. BP said the cost of its response to the oil spill so far is $1.6 billion but said it was too early to quantify the final bill. The U.S. said it will ask BP to create an independently administered fund for reimbursing Gulf Coast businesses and residents hurt by the massive spill, which has affected four states. THE DETAILS: BP expects to have the capacity to capture between 40,000 and 53,000 barrels of oil a day by the end of this month, up from its current capture rate of about 15,000 barrels a day. Scientists estimate the well is spewing up to 40,000 barrels a day. BP said further enhancements will increase the collection capacity to as high as 80,000 barrels a day by mid-July. The new plan is in response to U.S. Coast Guard demands that the company come up with a more aggressive plan to contain the leak. Meanwhile, BP said its costs so far total $1.6 billion, including the spill response, grants to U.S. Gulf states and claims paid. BP said it has made more than 26,500 payments to claimants totaling more than $62 million. One analyst said the ultimate cost of the spill could be between $3 billion and $6 billion. Some U.S. officials are concerned BP could avoid paying claims if it files for bankruptcy protection and say creating an escrow account to cover claims could provide a measure of security. BP insists it has the financial muscle to pay for the cleanup. Democrats in the U.S. Senate asked BP to set aside $20 billion in an account. President Obama has suggested BP suspend its second-quarter dividend payment to shareholders and pay claims to Gulf Coast residents. BP's board was scheduled to meet Monday, but no decision is expected on whether it will pay its full dividend. BP Chief Executive Tony Hayward has said the board could consider cutting or deferring the dividend. The Deepwater Horizon drilling rig at BP's Gulf of Mexico oil field exploded and later sank in April, killing 11 workers and unleashing the worst offshore oil spill in U.S. history. The oil threatens to cause environmental and economic devastation in the region. MARKET REACTION: BP's ADRs fell 9% to $30.92 in recent trading. BP has lost about 40% of its market value as investors, worried about the size of the final cleanup bill, have dumped the stock. In London, BP shares closed more than 9% lower at 355 pence. DOW JONES COVERAGE: -BP Outlines Latest Strategy To Capture More Oil From Spill -2nd UPDATE: Senate Democrats To BP: Set Aside $20B For Spill -BP: US Oil Spill Response $1.6B To Date; 51,000 Claims Submitted -WSJ: US To Demand BP Fund -BP: No Decision On 2Q Dividend Expected At Mon Board Meeting For more coverage of the oil spill, please search under the code BP. (END) Dow Jones Newswires June 14, 2010 13:12 ET (17:12 GMT)