UPDATE: BP Says Gulf Oil Spill Response Costs Up To $2 Billion

21st Jun 2010 08:51

By Jeffrey Sparshott Of DOW JONES NEWSWIRES LONDON (Dow Jones)--BP PLC (BP) shares fell as much as 4.2% Monday morning amid continuing uncertainty about the long-term financial and environmental damages from the Gulf of Mexico oil spill. At 0733 GMT, BP's shares were down 12 pence, or 3.2%, at 346 pence, making it the worst-performing company in the FTSE100 index. BP Monday morning said costs for the Gulf spill response had reached $2 billion as it continues work to contain the leak and to pay claims for damages. To date, more than 65,000 claims have been submitted and more than 32,000 payments made, totaling about $105 million, BP said. "It is too early to quantify other potential costs and liabilities associated with the incident," the company said in a statement. BP last week struck a deal with the White House to set up a $20 billion claims fund over 3 1/2 years. The agreement initially bouyed the company's shares, though investors are now weighing new information on the size of the spill and potential costs to respond. U.S. Representative Ed Markey (D., Mass.) said Sunday that BP's worst-case scenario for the Deepwater Horizon oil spill estimated a potential leak of 100,000 barrels of oil a day. The well is now estimated to be leaking between 35,000 and 60,000 barrels of oil a day into the Gulf's waters. And press reports over the weekend indicated that BP plans to raise about $50 billion to cover the cost of the Gulf of Mexico oil spill. BP downplayed both reports. On Monday the London-headquartered company said it was progressing with plans to capture more oil gushing from the well. Two systems are now in place and on Saturday captured 11,050 barrels of oil. A third system remains on schedule to begin first operations around the end of June or early July. "Plans also are being developed for further options to provide additional containment capacity and flexibility. These projects are currently anticipated to begin operations around mid-July," BP said. By mid-July, BP hopes to be able to capture 60,000 to 80,000 barrels of oil a day, the company said in a June 13 letter to the U.S. Coast Guard. Longer-term, BP hopes to stop the leak entirely with relief wells, though they are not expected to be completed before early August. -By Jeffrey Sparshott, Dow Jones Newswires; +44 (0)207 842 9347; [email protected] (END) Dow Jones Newswires June 21, 2010 03:51 ET (07:51 GMT)