Bill for Gulf oil disaster ‘may spiral even higher’

BP today admitted that the cost of the Gulf of Mexico oil spill could rise further as analysts welcomed the decision to "kitchen-sink" potential losses.

Chairman Carl-Henric Svanberg said he could not be 100% certain that the bill will not rise from the $32.2 billion (£20.8 billion) that the firm has set aside.

He said he did not think BP would be found guilty of gross negligence over the disaster but conceded that if it was, costs could spiral.

Svanberg said: "It's a disaster and there's a lot of cost associated with it and this is the first time we have given an estimate, and that estimate is based on our belief that we are not grossly negligent." The $32.2 billion that has been set aside to cover the costs was at the top end of analysts' expectations.

Peter Hitchins of Panmure Gordon said: "It's basically a kitchen-sink job. I think it's the board trying to wipe the slate clean."

But Simon Hawkins of Ambrian Capital said: "I'm not thinking that this is going to be the last charge that will come as a result of this, but at least it's the first stab and we get a feel for the size of it.

"They have taken steps to draw a line under what was an unlimited liability."