NEW YORK (AP) — BP shares slumped 5 percent after a judge ruled that the oil giant’s reckless conduct led to the worst U.S. offshore oil spill, a decision that could cost BP an additional $17.6 billion.
BP shares fell $2.72, or 5.7 percent, to $44.99 around midday, reducing the company’s market value by $7 billion. The shares were near $60 per share just prior to the April 2010 spill.
The ruling means BP now faces a fine under the Clean Water Act of $4,300 per barrel of oil spilled. The number of barrels spilled is being debated but is likely to fall between 2.4 million and 4.1 million barrels, which makes for a fine of between $10.3 billion and $17.6 billion.
Investors have a few new concerns based on the ruling: The prospect of an additional big outflow of cash, and not knowing how or when the fine will be finalized or paid.
BP said it would appeal the ruling, a process that puts off a final decision on the fine and also likely delay other pending court cases concerning the spill.
“It’s pretty severe,” said Justin Jenkins, an analyst at Raymond James, about the ruling. “And now there are even more unknowns about what the final number will be.”
BP, which has already paid billions to those hurt by the spill, had set aside $3.5 billion for possible additional costs.