British Petroleum (NYSE:BP) said Tuesday it is running out of money in its Deepwater Horizon compensation fund for survivors of the April 2010 Gulf of Mexico oil spill.
The Guardian reported BP has only $300 million left after rising costs and dropping oil prices greatly hurt the company’s second-quarter performance; income fell from $3.6 billion in the first quarter to $2.7 billion in the second, missing the estimated $3.4 billion average of analysts’ expectations, Bloomberg reported.
BP originally allotted $20 billion to pay out in damages following the massive oil spill and the sinking of the Deepwater Horizon oil rig. On Tuesday BP said it would add another $200 million to the fund. It initially estimated the cost of the settlement would be $7.8 billion, but today those costs are up to an estimated $9.6 billion, which doesn’t include future claims, Bloomberg said.
Second-quarter output was down in the U.S. and in Russia, and BP admitted it was paying an “unusually high” tax rate of 45 percent in the second quarter, as compared to 35 percent a year ago. Shares were down 2 percent at the opening of trading on Tuesday.