BP oil spill cost is $32.2 billion

Svanberg & Hayward

Last month BP made headlines when it was announced that they had spend $3 billion on the clean-up thus far. This month, that total has hit $4 billion, but today it was reported that the oil company has set aside an enormous $32.2 billion in order to sufficiently cover the costs of the Gulf of Mexico oil spill.

On top of this, it was finally confirmed that BP chief executive Tony Hayward would be stepping down from his current position ‘by mutual agreement' in October, being replaced by fellow executive, Bob Dudley, who is currently in charge of day-to-day clean-up operations in the Gulf.

Hayward isn't completely leaving BP however and is likely to retain some sort of role in the firm. It is expected that BP will give him the position of non-executive director of its Russian joint venture, TNK-BP.

Heavy losses

In the wake of the disaster, BP has seen losses of up to $16 billion for the second quarter of the year. As a result of these massive losses and the need to cover the clean-up operations as well as maintaining financial liquidity, BP has also announced it will sell of up to $30 billion worth of assets.

In a statement, BP chairman Carl-Henric Svanberg said, "The BP board is deeply saddened to lose a CEO whose success over some three years in driving the performance of the company was so widely and deservedly admired."

Mr Svanberg said the Gulf disaster had been a "watershed incident" for BP and there was a need for the company to change going forward, with a fresh leadership.

For his part, Tony Hayward said that now the oil spill had been capped, now was a good time to leave his post. "With the leak now capped, we have reached a significant milestone. This provides a firm basis to reshape the company," he said.

Hayward is expected to receive a year's salary in lieu of notice, amounting to £1.045 ($1.64) million.

While BP is setting aside $30 billion for the clean-up, Svanberg was quick to point out that there was no certainty the final bill for the spill would not be higher. Rumours have it going as high as $45 billion.

Relevant articles:

BP chief Hayward to step down? | Gulf clean-up hampered by storm | Gulf well cap holding, oil seepage detected

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