BP failed yesterday to calm investor fears about the oil spill in the Gulf of Mexico, despite recording mammoth profits.
The oil giant’s profits hit $5.6bn (£3.6bn) in the first quarter of 2010, more than double the level of last year, thanks to higher oil and gas prices.
The underlying results were well ahead of forecasts but were overshadowed by the disaster in the Gulf of Mexico. The oil well is leaking 1,000 barrels per day of crude after the Transocean rig drilling exploded and sank with the loss of 11 workers. The workers are now presumed dead.
“The situation in the Gulf of Mexico is now looking more pessimistic and it looks increasingly likely that it will take months rather than days to remedy. Ultimately, the costs associated with this accident will be proportional to the time taken,” said Dougie Youngson, oil analyst at Arbuthnot.
The spill grew to cover 1,900 square miles on Monday as the US Coast Guard scrambled to stop the slick reaching the fragile Gulf Coast shoreline.
BP is responsible for the costs of the clean-up operation and could also face lawsuits. JP Morgan estimates the price of the incident at $1.6bn (£1.03bn). BP’s shares fell 1.3 per cent to 618.5p yesterday.