BP’s Spill Costs Look Manageable 8 Months Later

NEW YORK (AP) — As the Gulf oil spill gushed out of control, BP's financial liabilities seemed big enough to sink the company. No more.

Cleanup, fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has estimated, according to an Associated Press analysis. But they'll be far below the highest estimates made earlier by legal experts and prominent Wall Street banks, such as Goldman Sachs, which said costs could near $200 billion.

BP will survive the worst oil spill in U.S. history for several reasons: it has little debt; its global businesses are forecast to generate $26 billion next year in cash flow from operations; the environmental impact of the spill isn't as bad as feared; and the government seems unlikely to ban BP from Gulf drilling.