BP shares plummet around the world

By David Goldman, staff writer


NEW YORK (CNNMoney.com) -- Shares of BP tumbled in U.S. and overseas stock markets Tuesday after its latest attempt to stop the Gulf of Mexico oil leak failed.

BP's (BP) stock sank 15% in U.S. trading, down $6.40 to $36.55. It also fell 14% on the London Stock Exchange. The British oil giant's stock has plummeted nearly 40% since the Deepwater Horizon oil rig exploded on April 20, losing $74.9 billion of shareholder value. BP's market capitalization fell by $20 billion on Tuesday alone.

The company on Saturday announced the failure of its "top kill" solution, an effort to use mud to slow down the flow of oil into the Gulf. Similarly, BP's "junk shot" solution did not work, after attempts to slow the leak with garbage failed.

Shares fell farther at the end of the day, after Attorney General Eric Holder announced that he has launched a criminal investigation into the Gulf of Mexico oil spill.

Meanwhile, oil continues to spill into the Gulf at a pace of about 19,000 barrels a day, according to government estimates. The oil spill is now officially the worst in U.S. history, surpassing the Exxon Valdez spill off the coast of Alaska in 1989.

BP is currently working on a new solution, in which robots will saw off the "lower marine riser package" on the gushing oil well, preparing for the placement of a custom-made cap on the package. But even if that cap works, it would not completely stop the leak. A long-term solution to the oil leak -- the drilling of a relief well -- will not be completed until August.

The company said Friday its spill-related costs have totaled $930 million to date, but that figure could soar higher, even if the leak is soon contained.

Hurricane season officially started Tuesday, and the National Oceanic and Atmospheric Administration forecasted an unusually severe storm season. Meteorologists worry that strong hurricanes could hinder the oil-containment efforts or blow oil into coastal areas, causing catastrophic damage to Gulf economies.

BP also has to pay for the wildlife killed by the spill, and could be subject to lawsuits. The Obama administration has pledged that BP will be responsible for all cleanup costs.

Analysts have thrown out a wide range of estimates -- from $4 billion to $25 billion -- on how hard the incident will hurt the company's bottom line. Exxon (XOM, Fortune 500) paid $3.4 billion in cleanup costs, but ultimately only paid $507.5 million for the legal settlement, in addition to $500 million in interest payments.  To top of page

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