BP sets aside more oil payout cash

BP has set aside an extra 1.4bn US dollars (£913m) in compensation for the Deepwater Horizon disaster as it struggles to stem a tide of allegedly spurious claims which it says are inflating its payout bill.

The amount estimated by the company that it needs to compensate individuals and businesses has been increased from 8.2bn US dollars (£5.3bn) to 9.6bn US dollars (£6.3bn). It was previously 7.8bn US (£5.1bn).

It means that just 300m US dollars (£196m) is left of a 20bn US dollar (£13bn) trust fund set up by the company to settle its legal obligations following the disaster.

BP said it continued to dispute a court interpretation of the US settlement agreement it signed following the 2010 disaster in the Gulf of Mexico - which it has argued allows businesses to claim for non-existent losses.

Its total estimated bill following the disaster now stands at 42.4bn US dollars (£27.7bn), which also includes clean-up costs and fines.

Costs are being paid out of the 20bn US dollars trust fund set up following the catastrophe, but the latest figures show 19.7bn US dollars (£12.8bn) of this have now been used up.

It means BP is likely to face questions over where it will find any more cash should the compensation bill continue to rise.

The company disclosed the new figure as it published financial results for the second quarter of the year, which showed profits down sharply to 2.7bn US dollars (£1.8bn).

The 25 per cent decline compared with the same period last year was blamed on lower oil prices and a higher tax bill.