Oil spill drains BP's worth

NEW YORK - BP is probably sturdy enough financially to survive the worst oil spill in U.S. history, but investors are shaving billions of dollars off its value every day that crude gushes into the Gulf of Mexico.

On Tuesday, as the company's latest attempt at a fix of the oil gusher failed and the U.S. government announced it had opened a criminal probe into the disaster, its stock took a hit of 15 percent, or $6.43, to close at $36.52.

In dollar terms, that means the British oil giant is worth $75 billion less on the open market than it was when the Deepwater Horizon rig exploded April 20. Other firms involved in the spill - Transocean, Halliburton, and Cameron - have lost at least 30 percent in value.

And as oil seeps unchecked into the gulf, nearby states, businesses, environmental regulators, and injured workers and cleanup crews are looking at damages that could total billions more.

"This will be the mother of all liability claims," said Fred Kuffler, a Philadelphia maritime lawyer who has handled oil-spill lawsuits.

BP P.L.C. says it has spent $990 million trying to contain and stop the spill. Its liabilities and potential fines are growing by the day, and it could be August before the company gets control of the situation by completing two relief wells.

The company has agreed to pick up the government's cleanup tab and any "legitimate" damage claims. BP said Tuesday it had paid about $40 million to cover about half the 30,000 claims it had received.

At least 130 lawsuits have been filed seeking damages for business lost from the spill. Most are from operators of seafood-processing plants, charter-boat captains, hotels, restaurants, and others who make their living from the sea or from coastal tourism.

Based on federal law, BP also faces a minimum fine of $1,000 per barrel of oil spilled, said Eric Schaeffer, who led the Environmental Protection Agency's enforcement office from 1997 to 2002 and now directs the Environmental Integrity Project. The government estimates 20 million to 43 million gallons of crude have gushed into the gulf over the last six weeks. If the spill were contained today, the fines would add up to between $480 million and $1 billion.

In addition to cleanup costs, the government will likely ask BP to pay for restoring an oil-soaked coastline - including repairs to sensitive marshlands, oyster beds, and fisheries, Kuffler said.

BP also will face claims from commercial fishermen, hotels, party-boat operators, and other businesses that depend on the Gulf Coast.

"Think of everything you find at a beachfront resort like jet skis and trip planners," Kuffler said. "The contractors involved, they will all have claims."

The hit on tourism, fishing, property values, and other damages could total $15 billion, said Ahmad Ijaz, a University of Alabama economist.

BP is self-insured, and analysts say it has enough money to pay for the growing calamity without risking bankruptcy. Most of the claims will be spread out over many years.