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

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 16,880.36 -31.75 -0.19%
Nasdaq 4,462.90 0.00 0.00%
S&P 500 1,970.07 0.12 0.01%
Treasuries 2.55 0.09 3.74%
Data as of 5:41am ET
Company Price Change % Change
Bank of America Corp... 15.58 0.24 1.56%
Genworth Financial I... 13.98 -2.28 -14.02%
Facebook Inc 74.68 0.97 1.31%
Pfizer Inc 29.26 -0.21 -0.71%
Apple Inc 98.15 -0.23 -0.23%
Data as of Jul 30

Sections

The case involves bad mortgages sold by Countrywide Financial ahead of the Great Recession and its multi-billion dollar rescue by Bank of America. More

The case involves bad mortgages sold by Countrywide Financial ahead of the Great Recession and its multi-billion dollar rescue by Bank of America. More

Restrictive immigration policies prevent talented entrepreneurs from launching businesses in the U.S. So, they're moving to Canada. More

The Mason family, which has been struggling to pay the $100,000 student loan bill they were left with when their daughter passed away five years ago, is now seeing an outpouring of support. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.