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Deepwater Horizon oil spill: BP’s blackest hour

Oil spill’s clean-up estimated to cost BP $6m a day

BP is counting the cost of the catastrophic spill from the
Deepwater Horizon rig in the Gulf of Mexico. So far, estimates put the cost of
the clean-up operation at $6m a day.

The total cost of simply stopping the spill is likely to top $500m, in
addition to the collateral damage to the coastal economy that has been virtually
shut down in the wake of the spill.

Neil McMahon, an analyst at investment firm Bernstein, told The
Times
the impact on tourism along the Florida coast could be $3bn, while
Louisiana’s fishing industry could be hit to the tune of $2.5bn.

London insurers are also bearing the brunt. Five years since paying out
billions in the wake of the devastation caused by Hurricane Katrina, estimates
put the cost at $1.5bn, according to the Financial Times. A huge
$19.5bn was wiped off BP’s shares in the weeks after the spill.

Adding to BP’s woes is the reaction to chief executive Tony Hayward’s
handling of the crisis. The US media has been critical of his pronouncements,
with one leading commentator describing Hayward as resembling Ethelred the
Unready, an ancient king of England.

Comments such as: “The Gulf of Mexico is a very big ocean. The amount of
volume of oil and dispersant we are putting into it is tiny in relation to the
total water volume,”
are hardly likely to endear him to many in Louisiana any time soon.

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