Mounting problems send BP to 14-year low

25th Jun 2010 11:45

BP sunk close to 300p a share for the first time in 14 years Friday as clean-up costs continue to spiral and on fears about legal action, storms in the Gulf of Mexico, a possible fundraising and trouble in Alaska.The company said this morning it has spent $350,000 (£234,000) on the Deepwater Horizon oil disaster since Monday, taking total costs so far to $2.35bn (£1.57bn).It has paid over 39,000 claims worth nearly $126m out of 74,000 lodged following the explosion on the well in April that killed 11 workers.At the start of the week BP said it had shelled out $2bn (£1.4bn) on the spill, including $105m paid out to settle 32,000 out of 65,000 claims. But storms are brewing in the Gulf which could hamper efforts to mop up the leaking oil. Some 37,000 people, over 4,500 vessels and 100 aircraft are now engaged in the response effort. Any interruptions could mean millions of extra gallons of oil escaping from the broken well into the sea. Meanwhile, boffins at Nomura Securities want BP to approach the market for money to get it through the current crisis. It talks of "a near term credit event around BP", and that the speculation is "highly damaging" for the embattled oil giant. Analyst Alastair Syme's preferred short term solution is for an equity-linked financing, possibly with a sovereign wealth fund underwriting the issue.BP set up a $20bn (£13.5bn) fund last week, under pressure from the US government, to provide a pool of resources to satisfy future claims for damages resulting from the spill. It's already cancelled its dividends for the rest of this year, which should save it $7.9bn (£5.3bn).Problems aren't just confined to the Gulf. The Russians are demanding reassurances from BP bosses, and now the Obama Administration is studying the company's plans for the Liberty project in the Beaufort Sea off Alaska.It's feared politicians may, at the every least, demand further environmental scrutiny of the project. "We are looking into the issue right now," said US Interior Secretary Ken Salazar.While BP is hoping it can stop more oil escaping using extra containment systems, it's only the two relief wells that have any hope of stopping the leak for good, and they won't be ready until August.Responsible for the worst environmental catastrophe ever to hit America, BP has recovered about 364,500 barrels of oil from its containment efforts and managed to skim around 610,000 barrels of oily liquid off the sea's surface.