BP oil spill costs reach £2bn mark

BP has revealed the oil spill in the Gulf of Mexico has so far cost it a total of $3.12bn (£2bn).

The total includes the cost of containing the spill and cleaning up the oil, and the cost of drilling relief wells.

It also includes the $147m (£97m) paid out in compensation to some of those affected by the spill.

BP is struggling to protect its brand reputation as the effects of the oil spill, which happened on 20 April, continue to intensify.

Last month, BP chief executive Tony Hayward faced a US Congressional Panel where the brand was blasted for showing an “astonishing” amount of “complacency” over safety before the oil rig explosion.

In an internal BP document, the company estimated that 100,000 barrels of oil a day could, in theory, flow from the ruptured Gulf of Mexico well, though the brand is looking to distance itself from that now.

The company has already suspended paying out dividends and has set aside a $20bn (£13.5bn) compensation fund for victims of the crisis.

The company has already suspended paying out dividends and has set aside a $20bn (£13.5bn) compensation fund for victims of the Gulf of Mexico oil spill.

The company says its containment device for the ruptured well is working again after a brief shutdown and a second containment system has been launched, designed to bring oil and gas to the surface.

BP’s woes in the Gulf of Mexico seem to be deepening after the US Geological Survey said the oil spill crisis could double the number of estimates previously thought.

An ad campaign for BP apologising for the oil spill polluting the Gulf of Mexico was also slammed by President Obama. The company is responsible for almost one in every seven pounds of dividends paid to British pension pots.

London 2012 chiefs are continuing to back Games partner BP despite the oil giant being the subject of international condemnation following the Gulf of Mexico oil spill. Greenpeace has warned London Olympic chiefs that the 2012 Games risk being “tarnished” by their partnership with BP. A group of artists, poets, writers and film makers called Good Crude Britannia will picket a summer party held by Tate Britain that is celebrating 20 years of BP sponsorship.

Greenpeace also recently unveiled a press advertisement accusing BP CEO Tony Hayward of cutting investment in clean energy in favour of dirty sources of oil.

However, BP’s brand reputation crisis following the oil spill in the Gulf of Mexico has left rival petroleum companies relatively unscathed, according to YouGov BrandIndex data published last month.

The BP oil crisis and its aftermath – from a brand that had tried to reposition itself as sustainablehas raised the question whether rebrands can ever really work:

  • To read the cover story relating to this: ’Actions speak louder than logos’click here
  • To read Mark Ritson’s response to the cover story click here.
  • To view the Top 10 mistakes marketers make when rebranding – and how to avoid them table, click here.
  • To read Mark Choueke’s opinion on BP’s woes, click here.
  • For three business viewpoints click here.

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