SHARES in BP rose almost two per cent yesterday after the oil giant reached a settlement with businesses and individuals affected by the Gulf of Mexico oil spill worth an estimated $7.8bn (£4.9bn).
Some analysts said the expected payout was less than they had forecast, reduced legal uncertainty and suggested the final settlement with BP’s biggest opponent – the US government – would be much lower than the worst case scenario.
Analysts had given a wide range of forecasts for how much BP would have to pay out to compensate fishermen, condominium owners and hoteliers, with many predicting a figure of $14bn, although BP had taken a provision of just $6.1bn. The company has also taken a $3.5bn provision for expected government fines but the maximum possible level of penalty could be over $20bn, if BP is found to have been grossly negligent.
Analysts also said the agreement boosted the chances of a settlement with the government.
BP faces lawsuits from the states affected, after the blast on the Deepwater Horizone rig that killed 11 people in April 2010.