British Petroleum, the company whose drill site is spewing thousands of gallons of oil into the Gulf of Mexico each day, could pay for the entire costs of its cleanup thus far with just 3.8 days of profits, according to a new analysis.
The Washington Post reported Tuesday that the company is spending about $17.5 million a day on cleanup and mitigation efforts, which are aimed at stemming the flow of oil from a now-leaking well and containing the existing spill. The sum total of the firm’s expense has been about $350 million.
This compares with $93 million — a day — the company earned in the first quarter of 2009.
Using these figures, the liberal blog ThinkProgress calculated that BP could pay for the entirety of their cleanup efforts so far with just 3.8 days of profits.
“For now,” the Post wrote, “at least, BP’s prodigious costs combating the oil spill in the Gulf are outweighed by prodigious profits.”
“The amount of oil leaking into the Gulf of Mexico has been estimated at 5,000 to 25,000 barrels a day,” the paper adds. “In the first quarter, BP produced 2.5 million barrels of crude oil a day worldwide Ã¢â‚¬â€ and it received $71.86 for every barrel.”
To be sure, the entire costs of cleanup and subsequent litigation are sure to be appreciably more. But the fact that BP earns more than four times more in a day than they’re spending on the cleanup suggests the company won’t face long-term material financial consequences.
Stock traders have wiped more than $35 billion off the company’s market capitalization since the spill began. Analysts say the decline in the company’s capitalization appears overblown, since Exxon Mobil only ended up having to pay slightly more than $600 million for a tanker’s devastating spill off the Alaskan coast.
BP stock is up slightly today, despite a congressional hearing into the causes of the spill. The company has a total market capitalization of over $150 billion.
BP was leasing the oil rig Deepwater Horizon from oil rig company Transocean when the rig exploded into flames and sank. Under contracts between the companies, BP is responsible for the entire cleanup effort, even though Transocean actually owned the rig.
Despite more than two weeks of attempts using undersea robots and other high technology, BP has failed to stop oil from gushing up from the sunken wreckage of the Deepwater Horizon rig.
The structure sank 42 miles off the Louisiana coast on April 22, two days after a fiery explosion left 11 crewmembers missing and presumed dead, and the ensuing spill has spewed oil into the Gulf at the rate of at least 210,000 gallons a day threatening fisheries, wildlife and attractions like the sandy white beaches.
Estimates now put the leak rate at between 5,000 and 25,000 barrels of oil each day.