IT doesn’t rain it pours. Or in the case of BP, it spills. The situation facing the oil major goes from bad to worse. Chief executive Tony Hayward, initially credited with changing the firm’s reputation in the wake of the Texas oil refinery explosion, limps from one public relations disaster to the next.

Analysts from Barclays Capital now think the total cost of the clean-up will hit $23bn. In theory, BP is protected by a $75m cap on damages payments, although it has already said it will waive that (a wise move if it wants to continue exploration in the US).

The financial repercussions are sure to last long after the oil has left the ocean. BP cannot afford another disaster, even if the contractor was actually culpable in this instance. That means it will have to review safety at a time when it wants to be cutting costs.

The long-term environment for off-shore exploration will also be far less favourable. President Obama initially lessened safety requirements, but he is sure to reverse that position as pictures of oil slicked penguins become ubiquitous. Until the grand plan to stem the spill works, investors should sit tight.