BP confirms the Macondo well killed off

BP has “effectively killed” the leaking Macondo well in the Gulf of Mexico 153 days after the explosion that caused the death of 11 oil rig workers.

The group confirmed that it had sealed and killed the blown out well, which leaked over four million barrels of oil into the Gulf.

The five month spill, which outgoing chief executive Tony Hayward has called a “tragedy” has already cost the oil giant $9.5bn (£6.1bn).

But compensation claims connected to the spill have soared since Kenneth Fienberg, the independent claims payout administrator, took control of the Gulf Coast Claims Facility (GCCF).

Since 23 August, over 68,000 claims have been submitted to the fund, with 19,000 claims totalling $240m already paid.

This includes a $34.5m fund for real estate brokers and agents in the area.

This number is on top of the 127,000 claim payments BP made prior to the transfer to the GCCF, which totalled £399m.

BP has said the $20bn escrow fund the group set out in June would be more than enough to cover the costs arising from the spill.

Analysts maintain that BP still has the financial strength to meet all of its commitments to the clean-up and aftermath of the spill.

“BP still believes the [escrow] fund being set up will be more than adequate to cover compensation and we continue to believe it has the necessary financial strength to meet its commitments while continuing its ongoing operations,” said Christine Tiscareno at Standard & Poor’s Equity Research.

The group’s shares closed up 0.11 per cent at 411.35p after earlier in the day leading the markets higher.