Last month London-based BP agreed to deposit $20 billion in an independent account to pay compensation to victims. BP said it would sell $10 billion in assets to pay for damage from the disaster, which has already cost the company more than $3.5 billion.
Louisiana Treasurer John Kennedy has said the total cost of the oil spill may be as high as $100 billion. Oppenheimer & Co. analyst Fadel Gheit last month put the financial damage from the environmental catastrophe as high as $60 billion.
While BP could survive a $60 billion liability, “I am less certain they can survive $100 billion or more,” Gheit said in a phone interview.
BP generated $30 billion in cash flow in the last four quarters and had $5 billion in available cash, another $5 billion in credit lines and $5 billion in standby loans as of June 4, said spokesman Toby Odone. BP has said it won’t file for bankruptcy.
~~ Excerpt from Bloomberg
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