BP shares in freefall down £14bn as Gulf oil crisis deepens

1 June 2010 1 June 2010

BonTrade

BP shares are in freefall in trading on Tuesday after failing to stop the Gulf of Mexico oil spill while global stock markets dip lower by continuing worries about any possible continued recovery hopes.

BP shares fell as much as 20% at one stage this morning, wiping another £14bn off the company’s market value.

BP said a containment cap will be connected towards the end of the week, although the spill could worsen in the meantime.

BP has challenged widespread scientific claims that vast plumes of oil are spreading underwater from its blown-out rig in the Gulf of Mexico. The denial comes as the oil giant prepares for a new operation to put an end to the worst oil spill in US history, which could see the leak get worse before it gets better.

The company’s challenge to several scientific studies is likely to put it further at odds with an increasingly angry Obama administration, which has accused it of playing down the size of the leak in an effort to limit possible fines.

BP’s chief executive, Tony Hayward, said it had no evidence of underwater oil clouds. “The oil is on the surface,” he said. “Oil has a specific gravity that’s about half that of water. It wants to get to the surface because of the difference in specific gravity.”