BP to recover some of cash from clean-up

City A.M. Reporter
BP believes compensation claims related to its Gulf of Mexico oil spill will be less than the $20bn (£12.9bn) the oil giant has put into an independent claims fund, Citigroup said, following a meeting with incoming chief executive Bob Dudley.

“He added that given current estimates of claims the $20bn Independent Claim Fund (ICF) that BP established probably exceeds calls,” said Citigroup. He also said the $32bn provision BP made for the total cost of the disaster remained a reasonable indicator of eventual cost.

Dudley also told the analysts that claims by Gulf states for lost tax revenue related to the spill “should not be too high” as any tax drops due to lower economic activity following the spill would be offset by the economic stimulus of the response effort.

Citigroup said that, following the meeting with Dudley, it had growing confidence BP would reinstate its dividend early next year.

“Dudley pointed out the company was not ordered to cut the dividend by the US government – it was a choice by the corporation to preserve liquidity ... we believe the company can re-instate a dividend with the fourth quarter results,” Citigroup said.