Since the 20th of April when the Deepwater Horizon oil rig caught fire and sank killing eleven workers, BP has failed in its attempts to stem the outflow of oil from the ruptured pipe-work.

Millions of gallons of crude has swept out across the Gulf of Mexico leaving a trail of destruction. But that destruction is not just ecological.

It is now thought that the future of the company as it stands is now under threat. In one day yesterday £12 billion was wiped off the company’s value as its shares plunged by 13%. The US authorities are launching a criminal investigation into the actions of BP and connected companies. Eric Holder, the US Attorney General said "We will closely examine the actions of those involved in the spill. If we find evidence of illegal behaviour, we will be extremely forceful in our response …….. nothing is off the table …”

The cost of the clean up that has already gone above the $1 billion mark may well, according to some reports, end up costing four times that amount.

BP is a massive company that makes up some 7% of the entire FTSE 100 index. It can therefore be considered the most important company in the index. As the company has now lost about £40 billion in value it has a huge downward effect on the FTSE. A ten pence alteration in the value of BP shares will move the FTSE 100 by about nine points, which is significant.

More than that, BP supplies about one in every six pounds of share dividends paid into UK pension funds. Last year BP paid out $10 billion in dividends. It is expected that BP will announce that annual dividend payouts will be maintained despite the huge fall in value and massive costs racking up. This should bring some short term assurance but the long term survival of BP looks to be in severe doubt.

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