BP Believes Compensation Claims Will Be Less Than $20 Billion (BP)

BP BP believes that compensation claims related to its Gulf of Mexico oil spill will be less than the $20 billion currently allotted, Citigroup C analysts said Monday. After a meeting with incoming Chief Executive Bob Dudley, Citigroup noted that "He added that given current estimates of claims the $20 billion Independent Claim Fund (ICF) that BP established probably exceeds calls." A Reuters report notes that "Dudley also told the analysts that claims by Gulf states for lost tax revenue related to the spill "should not be too high" as any tax drops due to lower economic activity following the spill would be offset by the economic stimulus of the response effort." Citigroup remains confident that BP will weather the storm and eventually reinstate its dividend. "Dudley pointed out that the company was not ordered to cut the dividend by the U.S. government - it was a choice by the corporation to preserve liquidity ... we believe the company can re-instate a dividend with the Q4 results," Citigroup said. Shares of BP are up slightly this afternoon, to $38.33. Learn how to find the best stocks to trade each day in our 70 page E-Book and 90 minute online video for free.