The Firm . Oil is Stopped but Money Still Gushing From BP

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Oil is Stopped but Money Still Gushing From BP

HOUSTON (KTRK) -- The flow of oil from the broken well in the Gulf of Mexico means money has been flowing from BP's coffers.

 

The company is supposed to compensate everyone whose livelihood has been affected by the spill, and pay for cleanup. That means paying out $20,300 every minute.

 

BP estimates the spill will cost the company $32 billion. It is a staggering amount of money -- so much, that BP will be forced to continue selling off oil assets around the globe just to pay the expected bills. To give you an idea just how fast the bills add up, on the clean up alone, BP is paying $339 a second.

 

The clean-up gobbles up supplies and money in an almost unimaginable way. The Houston company behind one type of boom can't make enough fast enough for BP's needs.

 

On beaches, it's a good thing the oil stopped flowing when it did. Last week, the feds were nervous about running out of Tyvek clean up suits. One worker uses 11 suits every day -- across the Gulf coast, that's two million suits a month.

 

BP says they've already spent $2.9 billion on the clean-up effort. That likely doesn't count the cost of the company's feel good ads, or the departing CEO's severance, but will include the cost of all those claims for oil spill damage.

 

Claims administrator Kenneth Feinberg said, "It's easy to compensate a restaurant or motel on the beach where there's oil. You don't need the wisdom of Solomon for that claim."

 

BP's set aside $20 billion for those claims. But when those businesses aren't happy with the result, they may sue. And BP is already facing tens of thousands of lawsuits.

 

Houston attorney Tony Buzbee said, "We have 15,000 pollution suits and 25 worker cases."

 

Buzbee represents 25 people who were on board the rig when it exploded, plus thousands of fisherman and business owners damaged when the rig exploded. The suits are expected to keep BP in court for years and cost the company big, big money.

 

"At least BP is planning for a large payout," Buzbee said. "In other words, they're not trying to minimize what their exposure is."

 

And then there will be the fines -- guaranteed fines -- by federal law at least $1,100 for every barrel BP's well spilled into the Gulf. In newly released documents, BP admits it spilled at least 53,000 barrels a day and it took 86 days to get that cap on. The minimum fine will be more than $5 billion.

 

Ted Oberg
KTRK ABC NEWS 13 Houston
July 27, 2010