BP Expects to Take $1.7B Deepwater Horizon Charge
BP plc announced Tuesday that it expects to take a post-tax non-operating charge of around $1.7 billion in its fourth quarter 2017 results, as part of a settlement program established following the Deepwater Horizon (DWH) incident.
Cash payments related to DWH this year are now anticipated to be around $3 billion, compared to the company’s third-quarter estimate of just over $2 billion.
“With the claims facility’s work very nearly done, we now have better visibility into the remaining liability,” Brian Gilvary, BP’s chief financial officer, said in a company statement.
“The charge we are taking as a result is fully manageable within our existing financial framework, especially now that we have the company back into balance at $50 per barrel,” he added.
Earlier this month, BP revealed that it expects to take a one-off non-cash charge of around $1.5 billion as a result of recently enacted changes to US corporate taxes, which will impact the company’s fourth quarter 2017 results.
BP did state however that it expects its future US after-tax earnings to be positively impacted by the changes, which lowered the US federal corporate income tax rate from 35 percent to 21 percent.
The company’s fourth quarter 2017 results announcement is scheduled for February 6.
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