BP shares dive after latest oil spill effort ends in failure

The stock at one point dived to 420p, the lowest level for more than a year, as crude continued to spew into the Gulf of Mexico.

BP has lost 36% of its market value, or £44 billion, since the explosion on the Deepwater Horizon rig 43 days ago killed 11 workers and triggered an environmental catastrophe.

The oil giant said the cost of dealing with the crisis now totals $990 million (£682 million).

The failure of the so-called "top kill" operation to block the leak and the latest sell-off of shares piled fresh pressure on chief executive Tony Hayward.

He faced a storm of protests from environmentalists and politicians after he told a US radio station: "There's nobody who wants this over more than I do. I want my life back."

Some in the City think his days are numbered. There are also growing doubts over whether BP can remain as an independent company with City analysts suggesting it could be a takeover target.
BP shares settled down 70.25p at 425½p, valuing it at $80 billion.

Credit default swaps — the cost of insuring against BP not paying its debts — shot up by 0.71 percentage points to 1.73% in an indication that some investors fear the disaster could bring BP to its knees.

BP today said its new plan to plug the leak, which involves remote-controlled submarines operating 5000 feet below the surface of the water ahead of the placing of a containment cap over the leak, was fraught with risks.

Chief operating officer, Doug Suttles, said: "We're confident the job will work but obviously we can't guarantee success." The company said the slice and cap technique has "never before been deployed at these depths and conditions".

There are fears the leak will now go on for at least another two months, well into the potentially damaging hurricane season, until relief wells can be drilled. Scientists estimate the well is leaking as much as 19,000 barrels of oil, or 800,000 gallons, a day into the Gulf.