BP’s quarterly profit plunges 80% because of costs
tied to Gulf spill
FROM WIRE REPORTS
FILE PHOTO An oil-drenched pelican tries to raise its wings on the beach of Louisiana’s East Grand Terre Island after the BP spill in 2010. BP still could be required to pay out billions more in civil claims.
Oil and gas giant BP’s profit fell nearly 80 percent in the fourth quarter in results released yesterday, dragged down by payouts related to the Gulf of Mexico oil spill.
BP said that net profit fell to $1.62 billion in the three months that ended on Dec. 31, down from $7.69 billion in the same period the year before. BP took a loss of $3.85 billion for its settlement of all federal criminal charges with the U.S. government. Underlying replacement-cost profit for the period, which strips out the changes in the value of inventories, was down 20 percent on the same period last year at $3.98 billion.
The company’s settlement with the U.S. Justice Department shut the book on the criminal probe of BP’s role in the 2010 Deepwater Horizon disaster and Gulf oil spill, but civil claims remain. The Lon-don-based oil giant could pay billions more in damages for the 2010 spill.
Nevertheless, the results surpassed analysts’ predictions, and BP said that its downstream activities — refining and sale of petroleum products — earned a record amount for the year.
Chief Executive Bob Dudley said in a statement that the result “lays a solid foundation for growth into the long term.”
Dudley also underscored that the company remains committed to its exploration in activities in Algeria, despite a terrorist attack that targeted one of its plants last month.
The company has racked up more than $24 billion in spill-related expenses and has estimated it will pay a total of $42 billion to fully resolve its liability for the disaster in the Gulf of Mexico.