BP (NYSE:BP) Surpasses $500 Million in Gulf Oil Spill Costs

According to reports from congressional auditors, BP Plc (NYSE:BP) has now paid out over $500 million for costs related to the cleanup of the Gulf of Mexico after the oil spill starting from the explosion on the Deepwater Horizon oil rig.

This shouldn't be confused with the Gulf Coast Claims Facility, which is the one run by Kenneth Feinberg and has paid out far more than the over $500 million paid from the federal oil spill fund. The Gulf Coast Claims Facility is the $20 billion fund BP has promised to pay claims out of over a four-year period.

The fund is question is called the Oil Spill Liability Trust Fund, where capital is raised through a tax of 8 cents a barrel of oil.

The Government Accountability Office said that fund is running out of money, and as it stands, can't extract more than $1 billion from any one company over any one incident.

As of the end of September, over $1.6 billion was still in the fund, but concerns are it'll very soon reach the $1 billion limit, and no more funds will be able to be dispersed.

This is the existing rule even if a company reimburses the government fund and there are funds available to pay out.

At this time Congress is thinking about removing the $1 billion cap and introducing legislation which would offer a more flexible cap where the money paid by an oil company over an accident wouldn't be included in the limits now constraining the fund.