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Total Cost of the 2010 Deepwater Horizon Oil Spill Reflected in US Stock Market

By Yong-gyo Lee and Xavier Garza-gomez

Abstract

Based on a market-based measure, the change (or loss) in market capitalization, this study documented that the total cost of the 2010 Deepwater Horizon oil spill was estimated to be approximately $251.9 billion as of September 19, 2010 when the well was permanently sealed (or $562.0 billion at the worst). It consists of: $68.2 billion to BP at the end (or $98.9 billion, the worst); $23.8 billion to eight partners (or $64.6 billion, the worst); and $183.7 billion to other firms in the oil and gas industry at the end (or $463.1 billion, the worst). THE 2010 DEEPWATER HORIZON OIL SPILL The blowout on April 20, 2010, and the subsequent explosion of BP Exploration and Production Inc. (BP hereafter) leased mobile offshore drilling unit Deepwater Horizon, located in the Macondo Well, led to the death of 11 rig workers and spillage of tens of thousands of barrels of oil per day into the Gulf of Mexico for the next five months. BP, as the owner of the oil well and lessee of the oil rig, made various attempts to stop and contain the oil spill, and clean the affected areas along the Gulf of Mexico. On September 19, 2010, when the well was declared permanently sealed, a total of 4.9 million barrels of oils had been released to the Gulf of Mexico. As a natural consequence, the disaster resulted in a huge financial loss to BP. BP spent $13.6 billio

Year: 2013
OAI identifier: oai:CiteSeerX.psu:10.1.1.363.6044
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