BP's Gulf clean-up bill hits $8bn - and rising

THE cost of BP's clean-up operation in the Gulf of Mexico has rocketed to $8 billion (£5.2bn), as the oil giant warned that US government proposals to restrict its drilling rights in the region could hinder its ability to pay compensation claims.

BP admitted its daily outlay, which currently stands at about $90 million a day, had not dropped significantly since it capped the well in mid-July following the disaster in April, when the Deepwater Horizon rig exploded, killing 11 workers and sending five million barrels of oil gushing into the sea.

Experts had expected that the company's costs would fall off sharply after the well was sealed for good by drilling a relief well into the base of the blown out well and pumping it full of concrete.

However, temporary measures to stem the flow of oil delayed work on the relief well, which BP said yesterday was now not likely to be completed until the middle of this month.

Since the processing of claims by individuals affected by the disaster was transferred to the Gulf Coast Claims Facility, BP has paid out $38.5m to 4,900 claimants.

Before the transfer, it made 127,000 claims payments, totalling some $399m.

BP was yesterday reported as saying it would struggle to meet the compensation payments unless it was allowed to continue drilling in the Gulf.

"If we are unable to keep those fields going, that is going to have a significant impact on our cash flow," said BP executive David Nagle.