Reply #14: That seems to conflict with this... [View All]

[Statistical]

Oil Spill May Cost Insurers $1.5 Billion in Claims
http://www.bloomberg.com/apps/news?pid=20601087&sid=auMyhffF2kHU

Lyods of London (insurance company) puts number on their cost to BP spill @ $600M to $800M
http://www.cnn.com/2010/BUSINESS/05/27/bp.spill.lloyds.insurance/index.html

Still seems to be conflicting reports and the insurance amount seems to be small relative to overall cost $1.5B vs $25B+ so to be conservative one could assume BP is nakedly uninsured.

The other thing to remember is BP only owns 60% of the well. 40% of potential profits (and in this case losses) belong to 2 other parties.

Here is one such party.
http://www.forbes.com/2010/05/04/energy-news-marathon-oil-anadarko-earnings-marketnewsvideo.html

Ignore the number (in terms of dollar costs) way out of date since spill has continued a month since then but looks like Andarko is going to be on the hook for 25% of damages. BP is handling cleanup but my guess is they are going to push 25% of total bill onto Anadarko.

Anyways it is complex. Multiple parties, multiples insurance contracts, multiple outcomes.

The large issue is IF BP keeps declining you reach a point where assets owned by BP are worth more than the shares and then liability or not it is like getting couple hundred billion worth of oil assets on sale. Exactly where that number is really depends on how the situation works out and what other oil companies ultimately think it will cost BP (and thus them if they buy BP).