BP Plc’s legal proceedings over the Macondo well that caused the worst U.S. oil spill may last into 2014, Citigroup Inc. said, citing the company’s lead lawyer.
Blame for the accident will likely be apportioned in late 2013, with punishment decided the following year. That’s later than analyst Alastair Syme had expected and is “slightly more favorable” for the company than an earlier decision, he said in a research note published today.
BP has set aside about $40 billion for costs from the disaster that spewed almost 5 million barrels of oil into the Gulf of Mexico last year. Shares are down more than 30 percent since the spill.
“There is still a risk that ultimate fines and penalties could be above BP’s current financial provisioning,” Syme wrote.
The company is counting on $5 billion in fines and $7 billion in compensation. If BP is found to be grossly negligent, its costs could rise by another $10 billion, Syme said.