BP building 'war chest' to soften financial fallout

A British Petroleum sign is seen at a gas station in Manassas, Va.

TEXT OF STORY

Steve Chiotakis: The latest on BP and the oil gusher in the Gulf of Mexico that's consuming the environment and the British oil company. Today the spill is likely to become the largest ever in the Gulf -- 140 M million gallons released. That would eclipse the former record holder, an oil disaster back in 1979. And with a cleanup bill at $2 billion and counting, BP's trying to raise more cash. Analysts say the company needs the money to fill its escrow account for the leak. From London, Marketplace's Stephen Beard has more.


Stephen Beard: The idea that BP may run short of cash would have seemed laughable before the disaster in the Gulf. It was Britain's biggest company. It was awash with money. But in recent weeks, the company has felt compelled to raise more than $20 billion. Now it's reported to be tapping its bankers again. BP is said to be trying borrow another $5 billion.

Nick McGregor is chief oil analyst with brokers Redmayne Bentley. He says BP is preparing for the financial fall out:

Nick McGregor: It's building a war chest at the moment, it's accumulating funds to deal with the worst case scenario from the Gulf of Mexico.

BP shares have enjoyed a rare revival. They shot up more than 5 percent yesterday after analysts suggested that Exxon-Mobil should bid for the beleaguered company.

In London, this is Stephen Beard for Marketplace.

About the author

Stephen Beard is the European bureau chief and provides daily coverage of Europe’s business and economic developments for the entire Marketplace portfolio.

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