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BP shares fall over penalty fears
Stocks drop in early trading in London over fears of costs of oil spill clean-up.
Last Modified: 10 Jun 2010 18:28 GMT
BP has spent about $1.43bn attempting to stop
the oil leak and on compensation [AFP]

BP shares have fallen 15.7 per cent in early trading in London, on fears of rising costs BP are liable for due to the spill.

The oil-giant's shares dropped 4.87 per cent from Wednesday's close and have now depressed by almost half - equal to some 70 bn dollars -since the Deepwater Horizon oil rig that it operated sank on April 22.

BP's share price plunged to a 14-year low in the US on Wednesday.

It has spent about $1.43bn attempting to stop the leak and on compensation so far.

The US on Wednesday put additional pressure on BP to suspend dividend payments to shareholders and provide greater compensation for the spill.

BP said last week it had "plenty of" cash to deal with the problem and the Obama administration has made similar comments.

'Anti-British rhetoric'

The crisis in the Gulf of Mexico has led to some recrimination between the US and the UK - from where BP originated.

in depth

Following criticism of BP from Barack Obama, the US president, on the handling of the spill, Boris Johnson, the mayor of London, reacted saying that "anti-British rhetoric" was becoming increasingly common.

"I do think there's something slightly worrying about the anti-British rhetoric that seems to be permeating from America," Johnson told BBC radio.

"I would like to see a bit of cool heads rather than endlessly buck-passing and name-calling.

"When you consider the huge exposure of British pension funds to BP it starts to become a matter of national concern if a great British company is being continually beaten up on the airwaves.

"It was an accident that took place and BP is paying a very, very heavy price indeed."

Ken Salazar, the US interior secretary, told a senate hearing on Wednesday that he would ask BP to repay the salaries of workers laid off because of a six-month moratorium on deepwater exploratory drilling imposed by the US government in the wake of the BP spill.

72-hour deadline

The company has said it will pay for the clean-up and direct damages to those affected by the spill, but the moratorium was a government decision and costs related to it were a different matter, a BP source said, adding that the company believes it may be heading for a showdown with the White House over widening liability demands.

In another sign of the government stepping up the pressure on BP, the oil company was given a 72-hour deadline from Tuesday to produce improved plans on containing the giant spill.

Rear-Admiral James Watson, an on-scene co-ordinator for the US Coast Guard, has ordered the company to produce contingency planning for its "top hat" containment system and explain how it intends to recover the remaining crude and natural gas still leaking.

The current procedure, which began on Saturday, involves a cap placed over the leak that gathers the oil, allowing it to be siphoned up via a pipe to a container ship.

By the most conservative estimate, 26 million litres of crude have spilled into the Gulf - though US officials say the actual tally could be much higher -  since the crisis began when its offshore drilling rig exploded, killing 11 workers.

The oil spill has begun fouling the US coastline, coating birds and other wildlife, and severely affecting the fishing industry.

Source:
Agencies
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