For BP, $20 Billion A Drop in A Very Large Bucket

[amborin]

For BP, $20 Billion A Drop in A Very Large Bucket

NEW YORK – BP holds enough oil in its reserves to single-handedly supply the United States for two years. It has little debt for a company of its size and makes more money than Apple and Google combined.

So when the White House arm-twisted its executives into setting aside $20 billion for the Gulf oil spill, investors weren't worried it would bankrupt BP. They barely batted an eye. "The U.S. government will become insolvent before BP does," said Bruce Lanni, a stock analyst with Nollenberg Capital Partners.
Sure, BP stock has crumpled in half in a matter of weeks. Creditors are demanding ever higher interest. But this time it's not some inscrutable, high-flying Wall Street bank in trouble.

BP posted $17 billion in profit from its vast operations around the globe last year, compared with $5.7 billion for Apple and $6.5 billion for Google.

More important, in the past three years the company generated $91 billion in cash flow from operations.

It's not highly leveraged with debt, as banks were during the financial crisis. And it has 18 billion barrels of oil in proven reserves, twice what the U.S. consumes every year.
BP has spent about $1.8 billion on the spill so far, but that's the first drop in a very large bucket. If BP faces criminal charges, for instance, it could end up having to pay tens of billions in legal costs alone.
Analyst estimates of BP's total cost range from $17 billion to $60 billion. If the worst predictions about the leak come true, that figure could surpass $100 billion, based on a Goldman Sachs estimate that each barrel of oil spilled could wind up costing as much as $40,000 in cleanup and compensation.

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http://news.yahoo.com/s/ap/20100617/ap_on_bi_ge/us_bp_s_future




some articles on Zero Hedge estimated the GOM cleanup costs would approximate $330 billion.....

[OhioChick]

1. When I first heard about this 20 Billion...

My first thought was.... that wasn't shit. It's going to cost FAR more than that.

[fishbulb703]

5. +1000 It will cost trillions

[damntexdem]

2. Just a first step. Its entire assets won't be enough.

But we must push to put all BP assets at risk for purposes of covering part of the costs.

[blindpig]

4. And let them fuck up some more shit

in another part of the world to pay for this?

We should expropriate the entire energy sector

We should kill capitalism before it kills us.

[Aramchek]

3. the 20 billion isn't for cleanup. but presenting facts isn't really the purpose of this OP, is it?