Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

BP claims could be under $20 billion

By Aaron Smith, CNNMoney.com staff writer


NEW YORK (CNNMoney.com) -- Total claims against BP could end up being less than the $20 billion the company pledged to set aside, according to incoming Chief Executive Robert Dudley.

A Citigroup (C, Fortune 500) report said that analysts met with Dudley, who told them "that given current estimates of claims the $20 billion Independent Claim Fund that BP established probably exceeds calls." BP confirmed the comments.

BP (BP) has pledged to set aside $20 billion to compensate businesses and individuals hurt by the worst offshore oil spill in history, stemming from the April 20 explosion of an offshore oil rig that killed 11 workers.

Dudley also said that BP's "eventual cost" from the disaster would probably total $32 billion, as the company had forecast earlier this year, according to the Citigroup note.

BP spokesman David Nicholas told CNNMoney.com that the $32 billion estimate includes the total cost of the disaster for BP - including claims as well as clean-up.

As for the claims, he said the $20 billion escrow fund is "neither a floor nor a ceiling." BP is not bound to pay $20 billion if the claims total less than that, he said, and the company would be required to pay more than $20 billion if the claims end up totaling more than that.

So far, the first payment of $3 billion has been made into the escrow fund, said Nicholas.

Dudley, an American, is the replacement for the maligned former CEO Tony Hayward. To top of page

Index Last Change % Change
Dow 15,914.74 -99.64 -0.62%
Nasdaq 4,283.59 14.83 0.35%
S&P 500 1,851.86 -0.35 -0.02%
Treasuries 1.70 -0.02 -1.39%
Data as of 2:02am ET
Company Price Change % Change
Bank of America Corp... 11.98 -0.22 -1.80%
Facebook Inc 101.00 1.46 1.47%
Pfizer Inc 29.49 0.39 1.34%
Apple Inc 94.27 -0.72 -0.76%
Microsoft Corp 49.71 0.43 0.87%
Data as of Feb 10
Sponsors

Sections

Tesla CEO Elon Musk issued an earnings update and shareholder letter Wednesday that confirmed 2016 delivery guidance and promised profits ahead. More

The Fed Chair was criticized on a range of issues, from China and monetary policy to black unemployment and the strong dollar. More

Twitter's stock is sinking fast after the company reported that it lost customers in the fourth quarter of 2015. More

STEM3 Academy was started specifically for students with autism, ADHD and Asperger's Syndrome. Its STEM-based curriculum is breaking through barriers. More

The average price for domestic airfare dropped in the third quarter of 2015, and travel experts expect the trend to continue in 2016. More