BP's profits to soar

Filed in archive Ethics on May 31, 2010

BP shareholders are now suing the oil giant for exposing the company to potentially enormous liability related to the Deepwater spill disaster in the Gulf of Mexico.

But then, BP can afford it. As the Washington Post reports, cleaning up the spill just costs BP a few days of profits

It's now estimated that the clean up could cost BP $3 billion. But because BP makes $93 million a day, that would be just one month's worth of business. Remember too that this is a worst case estimate. Analysts also say that BP has plenty of borrowing capacity too. It can easily borrow $20 billion without breaching its debt covenants.

Let's just do the math. According to BP's own figures, the company made a $14 billion profit and sold $239 billion worth of petrol last year. Even if the spill cost BP $3 billion, it wouldn't even be a quarter of the profit.

This is why the only thing the company seems to be worried about is its tarnished reputation.