On the heels of a meeting with Bob Dudley, BP’s next Chief Executive, one of the analysts at Citigroup reported that British Petroleum (BP) had allocated a budget of $20 billion to cover the compensation claims for the oil spill in the Gulf of Mexico, but, during the meeting, Dudley stated that the claims will be so much less than that.
In addition, according to Citigroup, Dudley said that the overall cost of the crisis was estimated to be $32 billion, but still this number would cover and even exceed the eventual cost.
Citigroup said, "Dudley pointed out that the company was not ordered to cut the dividend by the U.S. government - it was a choice by the corporation to preserve liquidity ... we believe the company can re-instate a dividend with the Q4 results".
Although BP did not announce anything officially from its side, Citigroup is currently sure that BP would be able to cover the financial damages and the compensations of this crisis and get back to the market faster than any forecast has predicted.
Furthermore, the investment bank received information from Dudley to keep the BP’s divestment target between $25 billion to $30 billion, although some experts said that this target might increase in the future.