BP shares fall after news of US legal fight

 
Marion Dakers
OIL giant BP’s shares suffered their biggest drop in almost four months yesterday after the US government’s decision to sue the firm for $21bn (£13.5bn), prompting fears that the total cost of the Gulf of Mexico could be far higher than predicted.

BP has estimated that the cost of clearing up and compensating victims of the disaster in April would be $40bn (£25bn), which some legal experts said could double if the US government lawsuit is successful.

UK-traded shares closed 1.4 per cent down at 470p, 28 per cent below the price on 20 April when the Deepwater Horizon rig exploded.

“It creates some fears concerning the ultimate decision on gross negligence or not,” said Societe Generale analyst Irene Himona. “There is ongoing legal uncertainty.”

ETX senior trader Manoj Ladwa said that “although the oil giant will have factored in any claims for gross negligence, it may have speed up any asset sales if it is to reinstate its dividend in the New Year”.

The US Justice Department has filed a civil complaint in New Orleans. Eight other companies, including oil platform owner Transocean, its insurer QBE and MOEX Offshore have also been sued in the US Justice Department’s filing.

Shares in Swiss-based Transocean, the world’s largest offshore rig contractor, dropped 4.4 per cent yesterday, while Anadarko’s shares were down 1.6 per cent.

The Department for Energy and Climate Change said it could not interfere with the US lawsuit. “This latest move is an expected next step in the process to evaluate the environmental damage and recover the costs of the spill.”

The department added: “We must remain fair-minded and not pre-judge the outcome of this or of other enquiries underway in the US.”