Brian Swint and Eduard Gismatullin
June 1, 2010
BP Plc fell the most in 18 years in London after abandoning an attempt to plug a leaking oil well in the Gulf of Mexico, the worst spill in U.S. history.
BP plunged as much as 15 percent to 420 pence, the steepest one-day drop since June 1992. The company said on May 29 a “top kill” attempt to plug the leak using heavy fluids and debris had failed. That rules out stopping the flow of oil from the well until relief drilling is completed in August.
“Until the flow of oil from this well can be halted, there will remain considerable uncertainty over the potential damages,” said Peter Hitchens, an analyst at Panmure Gordon & Co. in London. “Although we believe that the market has overreacted to the bad news, we feel that there will be little stimulus to the shares whilst this leak continues to pump oil into the sea.”
The company will now try to contain the spill by fitting a pipe over the leak later this week to bring the oil to a drillship on the surface, it said in a statement in London today. The operation may temporarily increase the flow of oil into the Gulf before a cap can seal the pipe. The cost of responding to the spill has risen close to $1 billion, BP said.