BP has reported a staggering $17bn loss for the second quarter, largely due to a $32.2bn pre-tax charge for the Gulf of Mexico oil spill. The company said the provision was based on its belief that it will not be found grossly negligent, which would significantly reduce potential fines under the US Clean Water Act.
Chairman Carl-Henric Svanberg told the BBC that there was no certainty the final bill would not be higher. He defended the departure of chief executive Tony Hayward, saying he was not the right man to lead the rebuilding, and described Hayward's £1m payment and £600,000 annual pension as contractual entitlements.
BP plans to sell $30bn of assets to cover the costs, which Svanberg insisted would not affect the core business. The company may also recover up to 35% of costs from its well partners, Anadarko and Mitsui.
However, analysts note that the provision does not include potential fines from other government investigations, and the final penalty could reach nearly $20bn if gross negligence is proved. BP's financial recovery depends heavily on avoiding that finding.
