Gulf cleanup costs cut into BP profits

LONDON, Nov. 2 (UPI) -- British petroleum giant BP said Tuesday the Gulf of Mexico oil spill cost $7.7 billion more than expected, cutting sharply into its third quarter profits.

Profits dropped from $5.34 billion in the third quarter of 2009 to $1.79 billion in the third quarter this year, The New York Times reported. Costs from the Gulf of Mexico oil spill had already cost the company $32.2 billion.

The extra charges were a "stark reminder that the fallout from the spill will follow BP for some considerable time to come," said Richard Hunter, the head of British equities at Hargreaves Lansdown Stockbrokers.

BP has not paid shareholder dividends since the oil spill erupted after an April 20 explosion on the Deepwater Horizon surface platform killed 11 workers.

As part of the fallout from the spill, the company replaced Chief Executive Officer Tony Hayward in October with Robert Dudley, who said the board would discuss a dividend payment plan next year.

For the third quarter, figures could have been worse. A recent run up in oil prices kept profits from falling further, the British Broadcasting Corp. reported.

Aiming to cover the cost of the cleanup, the firm expects to sell $30 billion of its assets by the end of the year.

Dudley said, "BP has refocused itself with safety as a priority and, in terms of its normal operations, the company continues to generate enormous amounts of income."