Reply #7: So far, BP has only paid 295 claims out of the 4,700 claims [View All]

10 Critical Facts about BP and the Gulf of Mexico Crisis


1. On May 10, BP said it had already spent $350 million as a result of the Deepwater Horizon accident.

2. By contrast, in the first three months of this year, BP made $93 million per day in pure profits. This does not include the huge salaries and perks of its executives that are considered “costs,” not profits. Thus, BP has spent what might seem to many people to be a big number on the accident ($350million) but it is only equivalent to 4 days of pure profits for BP.

3. BP has a market value (BP’s assets) of $152.6 billion.

4. So far, BP has only paid 295 claims out of the 4,700 claims made against the company for damages and losses incurred from the Deepwater accident.

Citigroup analysts have formally advised investors not to worry too much about “the likely costs to the company .” The Citigroup analysis notes that punitive damages against Exxon for the Exxon-Valedz oil spill in 1989 were originally set by the courts at $5 billion but reduced by 90 percent when the case reached the Supreme Court in 2008. The total cost to Exxon was $500 million in compensation damages and $500 million in punitive damages. The total cost imposed on Exxon after 20 years of litigation amounted to only $1 billion, or the equivalent of just 12 days worth of BP’s pure profits ($93 million per day) in the first three months of this year. Because of the Oil Pollution Act of 1990, BP and any other oil company that is responsible for an offshore oil accident is not legally required to pay more than $75 million in damages above the oil recovery costs. Thus, the government’s response to the Exxon Valdez accident was to actually protect the Oil Giants by limiting their liability and risk exposure in the event of a catastrophic accident. Again, the $75 million limit is less than 1 day of BP’s pure profits
in 2010.

The Obama administration maintains there should be no limit on oil companies' spill liability, but a top Justice Department official said it is not proposing to change the $75 million limit on BP PLC's Gulf of Mexico spill because the company has pledged to pay all legitimate claims.