Shares in oil company BP rose strongly Tuesday after one of the company's contractors agreed to settle claims arising from the Gulf of Mexico oil spill.
BP's shares were up 2.9 percent at 442 pence in morning trading on the London Stock Exchange, after closing the previous day at 429.6 pence, the lowest since Dec. 1.
On Monday, contractor Weatherford U.S. agreed to pay BP $75 million to settle all potential claims between the companies from last year's explosion aboard the Deepwater Horizon rig, which killed 11 workers, and the resulting major oil spill.
For its part, BP agreed to cover Weatherford for compensation claims, including for environmental damage and economic losses caused by the disaster. Civil and criminal fines and penalties and claims for punitive damages aren't covered by the agreement.
Analysts at Evolution Securities in London said the deal will put more pressure on rig operator Transocean, cement contractor Halliburton and BP's partner in the well, Anadarko, to agree settlements.
"Weatherford is the first of BP's contractors to formally agree with BP that the entire industry can and should learn from the Deepwater Horizon incident," the analysts said.
Weatherford, a Swiss-based oil field service company, manufactured the float collar used in BP's blown-out well. The device was designed to help contain the cement at the bottom of the well.
One of BP's partners in the well, MOEX Offshore 2007, agreed in May to pay BP $1 billion to settle all claims between them.
Weatherford said its $75 million was covered by insurance.
"We are extremely pleased to have reached an amicable resolution with BP, a valued customer, that gives our shareholders finality with respect to the vast majority of any potential exposure Weatherford might have from last year's incident in the Gulf," Weatherford president and CEO Bernard J. Duroc-Danner said in a statement.
BP said it has spent $6 billion so far to settle claims from the disaster.
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