BP kills the spill – but problems remain

It’s a big milestone but it’s not the end of the story.

152 days after the accident on April 20 in the Gulf of Mexico which killed 11 workers and led to the worst environmental disaster in US waters, BP on Sunday finally sealed its ruptured Macondo well.

The UK oil group has promised to restore the damage done to the waters off the gulf coast and the livelihoods of the people affected by the spill. But even once the clean-up effort is scaled back, BP faces challenges on numerous fronts: potential litigation – it could face civil fines of $1,100 per barrel of oil spilled and up to $4,300 per barrel if gross negligence is found – as well as a host of ongoing investigations into the causes of the accident on the Deepwater Horizon rig.

Longer-term, the company also needs to restore its battered reputation in the US. Bob Dudley, who takes over from the outgoing Tony Hayward as chief executive on October 1st, will have to prove that the company has learnt the lessons from the accident if it wants to keep operating in the US.

Before the disaster, the US was BP’s principal focus in terms of strategy and it will be keen to remain a big player there. It is up to Mr Dudley to make sure that it does – otherwise the pressure will be on the group to consider a more radical re-think of its strategy.

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