BP stock plummets as oil spill anger grows

The financial toll of the Gulf of Mexico oil spill escalated today as BP’s stock plummeted to a 14-year low.

BP stock dropped $5.45 dollars (€4.50), or 16%, yesterday – easily its worst day since the April 20 rig explosion that set off the spill. In the seven weeks since then, the company has lost half its market value.

The latest slide came after US interior secretary Ken Salazar promised a Senate energy panel to ask BP to compensate energy companies for losses if they have to lay off workers or suffer economically because of the Obama administration’s six-month moratorium on deepwater drilling.

The oil company captured an ever larger-share of the crude gushing from the bottom of the sea and began bringing in more heavy equipment to help in the effort, including a production ship and a tanker from the North Sea that will allow the system to process larger quantities of oil and better withstand tropical storms.

But investors have deserted BP amid fears that the company might be forced to suspend dividends, end up in bankruptcy and find itself overwhelmed by the clean-up costs, penalties, damage claims and lawsuits generated by the biggest oil spill in US history.

Meanwhile fishermen, businesses and property owners with damage claims against the company complained angrily of delays, excessive paperwork and skimpy payments that they said put them on the verge of going under.

Shrimpers, oystermen, seafood businesses, out-of-work drilling crews and the tourism industry are all lining up to get paid back the billions of dollars washed away by the disaster and tempers flared as locals attacked BP over what they saw as a tangle of bureaucratic red tape.

“Every day we call the adjuster eight or 10 times. There’s no answer, no answering machine,” said Regina Shipp, who has filed nearly $33,000 (€27,000) in claims for lost business at her restaurant in Alabama.

“If BP doesn’t pay us within two months, we’ll be out of business. We’ve got two kids.”

An Alabama property owner who has lost vast sums of rental income angrily confronted a BP executive at a town meeting and the owner of a Mississippi seafood restaurant said she was waiting desperately for a cheque to arrive because fewer customers were coming in.

Some saw dark parallels to what happened after Hurricane Katrina in 2005, when they had to wait years to be reimbursed for losses.

“It really feels like we are getting a double whammy here. When does it end?” said Mark Glago, a New Orleans lawyer representing a fishing boat captain in a claim against BP.

BP spokesman Mark Proegler denied the claims process was slow or the company was dragging its feet.

He said BP had cut the time to process claims and issue a cheque from 45 days to as little as 48 hours, provided the necessary documentation had been supplied.

But BP officials admitted that while no claims had been denied, thousands of claims had not been paid by late last week because the company required more documentation.

BP says it expects to spend $84m (€70m) this month alone to compensate people for lost wages and profits and that number could grow as new claims are received.

When it is all over, BP could be looking at total liabilities in the billions, perhaps tens of billions, according to analysts.

At the bottom of the sea, the containment cap on the ruptured well is capturing 630,000 gallons a day and pumping it to a ship at the surface and the amount could nearly double by next week to about 1.17 million gallons, said US Coast Guard Admiral Thad Allen, who is overseeing the crisis for the US government.

Adm Allen also confronted BP over the complaints about the claims process, warning the company in a letter: “We need complete, ongoing transparency into BP’s claims process including detailed information on how claims are being evaluated, how payment amounts are being calculated and how quickly claims are being processed.”

A second drilling vessel that will arrive within days is expected to greatly boost capacity and BP also plans to bring in the tanker from the North Sea on Monday to help transport oil and an incinerator to burn off some of the crude.

The US government has estimated 600,000 to 1.2 million gallons are leaking every day, but a scientist on a task force studying the flow said the actual rate may be between 798,000 and 1.8 million gallons.

Crews working at the site toiled under oppressive conditions yesterday as the heat index soared to 110 degrees Fahrenheit (43 degrees Celsius) and toxic vapours emanated from the depths.

Fireboats were on hand to pour water on the surface to ease the fumes.