ANKARA
Moody's, one of the three biggest rating agencies in the world, has turned BP’s rating outlook to negative, following the court ruling that BP was negligent in its response to the oil spill in the Gulf of Mexico in 2010.
The U.S. District Court Judge Carl Barbier in Louisiana, ruled last Thursday that BP had acted with gross negligence in the 2010 Deepwater Horizon oil rig accident in Macondo Prospect, which killed 11 people and caused the biggest oil spill in the U.S.' history.
Moody’s did not change its ratings of BP’s bonds, but stated that BP could pay a statutory maximum of $18 billion fine under the Clean Water Act, which would take the total accident costs after taxes beyond a threshold of $40 billion.
“This is considerably higher than the $3.5 billion Clean Water Act fine BP has already provided for,” stated Moody’s, “and would take the total Macondo costs after taxes well beyond the $40 billion threshold and scope of a stable outlook.”
Following the court decision, BP stated the evidence does not support the findings and it plans to appeal to the U.S. Court of Appeals for the Fifth Circuit.
Moody’s also affirmed BP’s ratings by stating that “the company is in a strong financial and liquidity position.”
Moody's commented on BP as having “$27 billion of unrestricted cash, an increasing operating cash flow profile over the next few years, $7.4 billion of committed bank credit facilities, and prospects for substantial asset sales proceeds under its $10 billion sales target through 2015.”
Additionally, the rating agency maintained that while BP's management has clearly indicated that these sales proceeds would be used for stock repurchases, this could provide additional flexibility as BP's liabilities unfold over the next several years.
www.aa.com.tr/en
