BP shares drop on US government Deepwater case stance

05 September 2012 23:31  [Source: ICIS news]

HOUSTON (ICIS)--Share prices of BP slipped on Wednesday following reports that the US Justice Department strongly reiterated its intent to show negligence and wilful misconduct in the events before the 2010 Deepwater Horizon fire in the US Gulf of Mexico.

BP shares on the New York Stock Exchange, closed at $40.36, down by $1.27. Shares were also down in London and Frankfurt.

BP earlier requested a $7.8bn (€6.24bn) settlement in a civil case against the oil giant stemming from the April 2010 Macondo oil well explosion and fire, according to news media reports. The disaster killed 11 workers and caused a massive spill.

However, filings by the Department of Justice with the US District Court in Louisiana appeared to boost investor fears that the settlement may go much higher.

The government blasted BP as having a culture of recklessness that helped to lead to the explosion.

“The behaviour, words and actions of these BP executives would not be tolerated in a middling size company manufacturing dry goods for sale in a suburban mall,” the Justice Department said in the filing, adding that BP’s “gross negligence and wilful misconduct are inextricably joined with the acts and omissions of [well contractor] Transocean.

The government said it “does not take a position as to the merits of the ultimate relief sought by BP” but added it felt compelled to respond to BP’s “misleading” presentation on its liability.

($1 = €0.80)

By: Brian Ford
+1 713 525 2653

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