Economic Impact of BP Oil Leak Continues to Climb

The economic impact from the April 20 oil rig drilling disaster in the Gulf of Mexico is being felt far beyond the Louisiana coast. It’s estimated that the expense to British Petroleum from the cleanup and payments to Gulf residents and businesses sidelined by the accident have risen to some $40 million daily. Credit Suisse has estimated that eventually the combined cost of the cleanup, fines and litigation could cost the oil giant as much as $37 billion–between $15 billion and $23 billion for the cleanup alone and another $14 billion in claims.

BP shareholders have been especially hard hit as the company’s stock has plummeted and experts estimate that the 34% drop in price since the incident represents a loss of as much as $75 billion in value. The stock had a slight rebound on the afternoon of June 2 (+2.6%), following a broad sell-off a day earlier, when the stock dropped 15%. Share prices of the other companies involved including Halliburton, Cameron International and Anadarko Petroleum also were up slightly on June 2, while those of rig owner Transocean Ltd. continued moving downward.

With its enormous size and huge profits ($6.2 billion in the first quarter of this year) BP is likely to survive the fallout from this incident, although a number of analysts have speculated that it may be weakened enough to be a merger or takeover target, with Royal Dutch Shell among the names mentioned in speculation.