BP sees oil spill claims below $20 bln – analysts

LONDON, Sept 13 (BestGrowthStock) – BP (BP.L: ) believes compensation
claims related to its Gulf of Mexico oil spill will be less than
the $20 billion the oil giant has put into an independent claims
fund, analysts at Citigroup said, following a meeting with
incoming Chief Executive Bob Dudley.

“He added that given current estimates of claims the $20
billion Independent Claim Fund (ICF) that BP established
probably exceeds calls,” Citigroup said in a research note.

Dudley added the $32 billion provision BP made for the total
cost of the disaster remained a reasonable indicator of eventual
cost.

Dudley also told the analysts that claims by Gulf states for
lost tax revenue related to the spill “should not be too high”
as any tax drops due to lower economic activity following the
spill would be offset by the economic stimulus of the response
effort.

Citigroup said that, following the meeting with Dudley, it
had growing confidence BP would reinstate its dividend early
next year.

“Dudley pointed out that the company was not ordered to cut
the dividend by the U.S. government – it was a choice by the
corporation to preserve liquidity … we believe the company can
re-instate a dividend with the Q4 results,” Citigroup said.

Analysts at Bernstein took a more sceptical view on a return
to dividends in a note on Monday.

“BP’s cashflow position should be just strong enough to
support a restoration of dividends by 1Q 2011, under an
$80/barrel oil price scenario based on estimates. However, this
assumes divestments are completed,” analysts at Bernstein said.

Dudley told the investment bank that BP’s divestment target
remained $25 billion to $30 billion, despite reports that this
had been increased by $10 billion.

BP was not immediately available for comment.

(Reporting by Tom Bergin; Editing by Hans Peters)

BP sees oil spill claims below $20 bln – analysts