BP Liability Reaches $3 Billion as Spill Reaches Texas

By Jon Hood
ConsumerAffairs.com

July 6, 2010
BP has already shelled out $3 billion in the effort to clean up the ongoing Gulf Coast oil spill, the company announced on Monday. Most of that money has been spent drilling relief wells, trying to contain the spill, and paying out $147 million in individual claims.

The amount might seem high, but it is likely only a fraction of what the company will eventually pay. Last month, the company agreed to set up a $20 billion escrow fund to pay off future claims. The decision came after BP was put on notice by President Obama, whose administration was concerned that the oil giant would declare bankruptcy and be unable or unwilling to pay claims that develop months or even years from now.

The latest announcement came during the same weekend that tar balls were found on the shores of east Texas, signaling that the spill has officially reached the shores of every Gulf state. Beaches in Mississippi and Florida have already been impacted, and Louisiana -- famous for its Cajun fare -- has seen its seafood industry grind almost to a halt.

Texas officials left little doubt as to who would pay for damage from the spill.

Any Texas shores impacted by the Deepwater spill will be cleaned up quickly and BP will be picking up the tab, Texas Land Commissoner Jerry Patterson said in a statement.

There is a bit of good news for BP, however; the companys stock rose over the weekend after the chairman of Libyas National Oil Company recommended that the Libyan Investment Authority invest in the conglomerate. Shokri Ghanem said he still [has] trust in BP, and called the companys shares good value for bargain hunters.

Some analysts have noted that BP is ripe for a takeover, although no prospective bidders have come forward yet. The British government is reportedly putting together contingency plans in case the oil giant collapses, although a spokesman cryptically declined to comment, saying only, If they are happening, we would never comment on them.

The company says it has so far cleaned up over 650,000 barrels of oil from the spill, about 30% of which have been burned off. The so-called gusher resulting from the April 20 explosion aboard the Deepwater Horizon spills between 35,000 and 60,000 barrels of oil every day.