BP bill for Deepwater disaster hits $42bn

British energy giant BP said net profits slumped by more than half in 2012 as the group was rocked by fines and asset sales linked to the 2010 Gulf of Mexico oil spill disaster, ahead of a US trial later this month.

The financial damage resulting from the Deepwater Horizon spill in the Gulf of Mexico continues to mount at BP, which incurred a further $4.1bn (€3.3bn) charge in the final three months of 2012, bringing the total clean-up bill so far to $42.2bn.

Earnings after taxation tumbled 54% to $11.582bn in 2012, compared with $25.7bn in 2011, BP said.

Adjusted net profit, stripping out fluctuations in the value of inventories, plunged by almost 50% to $11.993bn. Profits were also hit by divestments, including the sale of BP’s 50% stake in the troubled Russian joint venture TNK-BP to the main Russian oil producer Rosneft.

BP added it was stillassessing the impact of the deadly attack at its joint venture in the In Amenas gas site in Algeria last month, but remained committed to the country.

The energy major also revealed it had reached its target to sell $38bn of assets a year earlier than planned, as it sought to meet the bill for the oil spill costs.

The results were issued one week after a US judge approved a $4.5bn deal in which BP pleaded guilty to criminal charges from the 2010 oil spill.

The devastating blast on the BP-leased Deepwater Horizon drilling rig on April 20, 2010, killed 11 people and unleashed 4.9m barrels of oil into the Gulf.

Later this month, BP will face a mammoth trial consolidating scores of remaining lawsuits stemming from the worst environmental disaster to strike the US.

It must also still resolve a civil case on environmental fines which could amount to $18bn if gross negligence is found. BP also remains on the hook for billions in economic damages.

In spite of the plunging profits, chief executive Bob Dudley argued that the group was well-positioned for long-term growth.

“We have moved past many milestones in 2012, repositioning BP through divestments and bringing on new projects. This lays a solid foundation for growth into the long term,” he said.

“Moving through 2013, we will deliver further operational milestones and remain on track for delivery of our 10-point strategic plan, including our target for operating cash flow growth, by 2014.”