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BP Share Price Dives Over Oil Spill Fears
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11:03am UK, Tuesday June 01, 2010
Hazel Tyldesley, Sky News Online

BP's share price has plunged by almost 14% in early deals as the oil giant scrambles to control the Gulf of Mexico oil spill.

Investors are taking into account the rising cost of the disaster, which the US government has warned may not be resolved until August.

Since the Deepwater Horizon drilling rig exploded on April 20, the British firm has lost over £40bn of its value.

The losses are bad news for many British pension holders, as BP is a key stock for many UK pension fund schemes.

Over the weekend, the oil giant's so-called "top kill" attempt to block the leak in the Gulf of Mexico failed.

As the company faces the challenge of finding a new way to stem the follow of oil, another threat looms on the horizon - the impending hurricane season.

America's National Oceanic and Atmospheric Agency has predicted it will be a highly active season, with three to seven "major" hurricanes.

As well as wreaking havoc upon local communities, there are fears that a hurricane will push oil from the spill up the Mississippi delta.

The Deepwater Horizon response team, which consists of companies and government agencies, said: "The high winds and seas will mix and 'weather' the oil which can help accelerate the biodegradation process."

However, it acknowledged that high winds "may distribute oil over a wider area".

"It is difficult to model exactly where the oil may be transported," they said, adding that movement of oil would depend greatly on the track of the hurricane.

Contracted workers on patrol to clean the beach in Grand Isle, Louisiana

With the prospect of further difficulties ahead, BP's bill for containing, cleaning up and compensating for the spill is likely to soar above the £682m it currently stands at.

Officials fear the oil could continue to pour out of the undersea well until August, by which time two relief wells will have been drilled.

Meanwhile the still-growing slick is threatening the fragile wetlands of the US state of Louisiana, as well as the Gulf region's fishing and tourism industries.

Speaking about latest preparations to cap the leak, BP chief executive Tony Hayward said: "BP's priority is to keep as much oil as we can from causing additional harm to the Gulf, the shoreline and the people of the region.

"This planned multi-step containment strategy is our best option for achieving this as we work hard towards completing the relief wells that will kill this well completely.

"I hope we will see progress with these containment procedures in the coming days."

Around 20,000 people have already been deployed to contain and clean up the spill.

http://news.sky.com/skynews/Home/Business/BP-Shares-Take-Sharp-Price-Dive-Oil-Giant-Sees-Shares-Fall-By-14/Article/201005115641402?lpos=Business_Top_Stories_Header_2&lid=ARTICLE_15641402_BP_Shares_Take_Sharp_Price_Dive:_Oil_Giant_Sees_Shares_Fall_By_14%25