Monday, September 13, 2010

Citigroup (NYSE:C): BP (NYSE:BP) Spill Claims Below $20 Billion

Citigroup Inc. (NYSE:C) analyst Mark C. Fletcher said in a note today that last week, incoming BP (NYSE:BP) CEO Robert Dudley said in a meeting last week that the $20 billion set aside to meet claims against the company may be more than is needed.

Fletcher cited Dudley as saying the $20 billion probably exceeds what will have to be paid out.

Concerning the overall cost of the Gulf of Mexico oil spill, Dudley added the $32 billion estimated should be very close to the actual amount of liability faced by the company.

It is also thought the announced assets to be sold will be the parameters for the company, and there probably won't be a need to sell more than those already in play.

Unless there are new developments, the company also should remain intact and not have to be broken up to pay for liabilities.

Claims from states, which aren't included in the $20 billion fund, shouldn't be too high, said Fletcher, which has been confirmed by some claims already submitted to the company.

A spokesman from BP said he wasn't able to confirm Dudley's statements.

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