The oil spill from BP’s offshore platform has been in news since last week. I do not have any first hand idea of the ground realities. Based on news media and reports, as of today, the oil spill continues unabated, with many different estimates of rate of flow of crude oil in the sea. To me, this is an indicator that nobody knows how serious or trivial this crude oil spill is. There are no signs that in will stop in near future.
The news agencies government organizations have been showing that potential short term damage and long term impacts would be very significant (to local population and local businesses). At least for now, BP has also mentioned that it will pay for clean up and considers itself partially responsible. In short, BP is on the hook for cleanup, irrespective of what are the ground realities and technicalities.
According to one estimates, it is expected that BP will be liable up to $6 billion for clean up, $ 1Billion for litigation, and $3 Billion for compensation, and $4 billion in lost revenue. This is a total of $14 billion. I am not so sure if these estimates are in the ball park. However, it gives some idea on the scope of the financial impact. continue reading rest of the article….