BP Shares Hit by Manslaughter Report, Downgrade

Tuesday, 29 Mar 2011 02:56 PM

 

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Shares in oil major BP fell on Tuesday on a report the company's managers could face manslaughter charges following the Gulf of Mexico oil spill, which could lead to much higher fines over the disaster.

U.S. prosecutors are considering whether to pursue manslaughter charges against BP managers for decisions made before the explosion on the rig that killed 11 workers and caused the biggest offshore spill in U.S. history, a report from Bloomberg said, citing people familiar with the matter.

A U.S. official said the Department of Justice is investigating possible criminal charges related to the deaths of the workers. These charges could include manslaughter, but the official declined to confirm this was under consideration.

BP has admitted mistakes in the run-up to the rig blast but has denied accusations it was "grossly negligent", a charge that could add tens of billions to the final bill it pays for the disaster.

"A manslaughter charge makes a charge of gross negligence more likely," one dealer said.

If BP is found to be grossly negligent, the maximum possible fines it faces would rise to more than $21 billion from around $5 billion.

Also, this may mean the company is unable to force its partners in the well to pay their 35 percent share of the total clean-up bill, now estimated at $42 billion.

It could also open the floodgates to legal claims worth many billions.

BP declined to comment. Another dealer said a downgrade from Collins Stewart also weighed on the shares.

The brokerage cut BP to "sell" from "hold", partly due to the spat between the company and its oligarch partners in its Russian joint venture TNK-BP, traders said.

BP shares closed down 2.2 percent, against a 0.3 percent drop in the STOXX Europe 600 Oil and Gas index.

© 2014 Thomson/Reuters. All rights reserved.

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