BP's Oil Spill Bill: $1.4 Million/Day for Robots, $12/Hr. for Cleaners

(June 8) -- What does $1.25 billion get you, if what you're shopping for is a solution to an oil spill? As BP's containment and cleanup efforts pushed on through Day 49 Monday, that's the kingly sum BP brass said the company has spent on its endeavors in the Gulf of Mexico -- with only partial and tenuous success to show for it.

So where did all that money go?

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Below is a rough, back-of-the-envelope breakdown of the biggest-ticket items on BP's spill tab to date. Many of the figures come from BP itself. Others come from the Coast Guard and the Unified Command. Still others are estimates based on surveys of local vendors -- such as aircraft charter operators -- and the opinions of experts. For instance, the ballpark price tag of the underwater robots the company has used in attempts to activate a malfunctioning blowout preventer and cap a crushed riser pipe are based on discussions with outfits that deal in similar equipment.

No matter how you cut the numbers, one thing seems clear: While it has proved willing to throw money at the problem since it erupted, BP has had to resort to a distinctly ad hoc approach; it is the last-minute shopper forced to pay extra for not having planned ahead better. And analysts say that $1.25 billion (which does not include another $360 million BP has committed for the construction of six berms in Louisiana's barrier islands to protect the state's marshlands from waves of crude) is only the beginning. The oil, though slowed, is still spilling, and BP's daily cleanup costs are rising.

Credit Suisse has calculated that BP's total cleanup costs could hit $23 billion. The company is likely to face hundreds of millions more in fines and lawsuits.

Here, meanwhile, is an accounting of the oil giant's layout to date.

The cleanup's grand total

$1.25 billion

BP's overall bill, so far, for containment and cleanup efforts

$25.5
million
BP's average daily expenditure on the oil spill, according to company estimates
$40
million
the true daily rate some analysts say it may be paying, thanks to rising costs

The line item breakdown

Line Item	Estimate
plugging the leak	$100 million Cost to drill two relief wells to intercept and isolate the leaking well.
paying the states	$170 million Grants made to Florida, Louisiana, Alabama and Mississippi, according to BP, which include money for general assistance as aid for the states' flagging tourist industries.
covering lost wages	$84 million Amount earmarked for compensation claims due to loss of income caused by the spill, according to BP. The company has paid out $40 million in such claims so far.
Coast Guard	$75,133,333 BP's tab for the Coast Guard's services, which are costing an average of $1,533,333 per day.
boat rentals	$3.72 million / day The running bill to engage the boats involved in containing the spill. Here's how that total breaks down: 3,100 number of boats Unified Command says are involved in the cleanup effort $1,200 amount BP is paying operators, many of whom are local fishermen, daily
robot rentals	$720,000 / day Cost to rent 16 remote-operated vehicles that have been at the center of BP's effort. Daily packages, including two ROVs, a crew and a ship from which to operate, can run upwards of $90,000.
plane rentals	$237,500 / day Estimated amount BP has spent on the 50 to 60 light planes and helicopters it has been flying over affected areas to spot oil, spray dispersant and guide boats in placing boom. The total here does not take into account BP's prior contracts with aircraft companies and uses local rental rates (which range from $300 to $1,700 per hour) for five-hour workdays.
cleanup crews	$960,000 / day Compensation for cleanup crews. BP has 20,000 people deployed, some paid and some volunteers. This figure assumes half of the workers are collecting a pay check for eight-hour workdays. 20k number of people BP has deployed, some paid and some volunteers $12 amount clean-up workers were paid per hour in advance of Obama's recent visit

Can BP afford to pay for the spill?

$2
billion
the cost of the Exxon Valdez
cleanup effort in 1989; the Deepwater Horizon spill is even larger
$5
billion
the amount of cash BP said it has on hand during a shareholder conference call last week

» Yes. Probably: Beyond cash on hand, BP also has $5 billion in banking facility funds and $5 billion in additional borrowing availability. "To them, it's not a lot of money," says Matti Teittinen, a senior equity analyst at energy industry research firm IHS Herold. But a piece in today's New York Times reports that some bankers aren't so sure and notes that a jury verdict against BP, coming on top of its cleanup bill, could deliver a fatal blow.