BP shares open 6.5 per cent higher after deal to set up oil spill fund

The Associated Press ~ staff The News
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LONDON — Shares in BP rose in London Thursday, as the company’s agreement to set up a US$20 billion fund and cancel dividend payments to cover damage from the Gulf of Mexico oil spill reduced uncertainty over its liabilities.

The shares were up 6.5 per cent at 359 pence ($5.27) as trading began on the London Stock Exchange.

The oil company’s shares had also rallied in U.S. trading Wednesday, gaining 45 cents to close at $31.85, after BP executives’ meeting with President Barack Obama produced an agreement.

Analysts said the deal helped provide clarity for investors.

“BP’s package agreed with President Obama should cool the political heat and provide some degree of comfort to equity and bond markets, shareholders and businesses/residents in (the Gulf of Mexico) affected by the Deepwater Horizon accident,” analysts at Evolution Securities said in a research note Thursday.

BP PLC’s shares have lost nearly half of their value since the April 20 explosion on the Deepwater Horizon rig which killed 11 workers and sent oil gushing from a broken pipe.

Organizations: BP, London Stock Exchange, Evolution Securities

Geographic location: LONDON, Gulf of Mexico, U.S.

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