BP shares tumbled more than 8 percent Thursday in New York trading, and the company has lost roughly $25 billion in market value since an offshore rig it hired in the Gulf of Mexico exploded last week and started spewing huge amounts of oil.
Eleven workers are missing and presumed dead following the disaster on the Deepwater Horizon, and a huge oil slick is creeping closer to land. Estimates of the amount of oil gushing from the seabed have risen to 5,000 barrels per day — five times what was originally thought.
BP shares fell Thursday as the situation seemed to be getting worse. Experts said the oil may reach shore by Friday, and President Barack Obama said BP will be responsible to pay for the cleanup.
BP confirmed Friday that it is self-insured for any costs related to the spill, so the company will have to absorb its full share of spending currently running about $6 million a day plus $100 million which it expects will be spent bringing in another rig to drill a relief well.
"It is too early to quantify other potential costs and liabilities associated with the incident," BP said in a statement released in London on Friday.
Jonathan Jackson, analyst at Killik & Co. in London, cited Merrill Lynch's analysis that a six-month cleanup effort could cost around $3 billion for a company which had a $5 billion profit in the first quarter.
"We are inclined to see this as a buying opportunity," Jackson said in a research note.
Jackson said that BP's difficulties had wider implications for the industry.
"As part of its efforts to increase security of supply, the U.S. government is looking to increase investment to develop domestic reserves. Following this spill, it may be more difficult to achieve this aim as environmental groups step up their opposition," Jackson said.
Transocean Ltd., the oil services company that owned the Horizon, has lost about $4.35 billion in market value since the explosion.
In Thursday trading, BP shares gave up $4.78 to close at $52.56. Transocean lost $6.32, or 7.5 percent, to end at $78.51.
© Copyright 2017 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.