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Mounting spill costs slam BP's shares

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Mounting spill costs slam BP's shares

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For BP, spewing oil equals plummeting shares. In London the energy giant’s shares slumped at one stage to their lowest level in 13 years on Thursday.

Their equivalent in New York was very volatile, having tumbled after US Interior Secretary Ken Salazar said BP would have to pay workers who will be laid off due to a drilling moratorium announced in the wake of the Gulf of Mexico oil spill.

That could cost many more millions of dollars.

BP has said it has enough money to cover all its liabilities and there was no justification for the huge fall in its share price.

Oil industry analysts agreed that the sell off has been overdone, but said investors were likely to shun BP’s shares for some time.

They pointed out there was massive uncertainty about the company’s future: it may have to cut the dividend paid to shareholders, as well as make management changes and its opportunities for growth will be more limited.