BP can 'tolerate Gulf spill penalties of $40bn'
But the report - 'BP Still Risks Big Claims as Macondo Proceedings Enter Second Phase - says a severe penalty resulting from a finding of gross negligence would change the equation, as PSC settlement costs keep mounting.
Phase 2 of the trial to determine limitation and liability will be critical in determining how much money the parties involved will have to pay in penalties, though actual amounts will be decided in a separate, later trial.
Moody's vice-president and senior credit officer Francois Lauras says: "BP can tolerate about $40bn in penalties, after taxes, under its A2, Prime-1 ratings
"A ruling in line with the company's current $3.5bn provision would leave some headroom to absorb other charges, including PSC settlement costs from payouts awarded for business economic loss claims, which ultimately depend on the interpretation of the Economic and Property Damages Settlement Agreement."
A US appeals court is due to decide on this in the coming weeks.
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