BP announced today that it suffered what The Guardian is calling “one of the largest losses in British corporate history” — a $17 billion shortfall in the second quarter of 2010. It also announced a number of company shake-ups, including a plan to sell $30 billion in assets and the resignation of CEO Tony Hayward, which has finally been confirmed after much speculation.
But there’s a silver lining for the company.
The $17 billion loss is thanks to the company’s decision to set aside $32 billion to pay for the $3 billion in cleanup costs incurred to date, and $29 billion for future costs. (That includes the $20 billion escrow fund for damages that President Barack Obama asked BP to set aside.)
MSNBC, however, pointed out that BP will be deducting this $32 billion from its tax bill, “reducing future contributions to U.S. tax coffers by almost $10 billion.” BP’s tax bill in the U.K. will also be reduced, the company told MSNBC.
According to the Financial Times, the tax deductions represent “a drop of more than a quarter in BP’s tax payments.”
BP’s spokesman Tony Odone told MSNBC that the tax offsets are “just normal practice.”
“We will pay less in tax because we are earning less, as you would as an individual if you were earning less,” Odone told MSNBC. “We are going by U.S. laws, we’re following the accounting laws of the country. We are a business and we have shareholders we are responsible to.”
Normal practice or not, whatever BP saves in taxes is what the government will have to make up otherwise. And then there’s the matter of Hayward and his departure. His resignation goes into effect Oct. 1, but he won’t be leaving empty-handed:
Under the terms of his contract, BP is giving him a year’s salary of $1.6 million, plus benefits, and according to the BBC, he’ll also collect an immediate $930,000 in annual pension. He’ll also retain shares of BP that could eventually be worth millions more.
BP said it plans to nominate Hayward for a position with TNK-BP, the company’s joint venture in Russia. He will be replaced by BP exec Robert Dudley, an American, who will become the company’s “first ever non-British chief executive,” according to The Associated Press.