LOS ANGELES (MarketWatch) -- BP PLC will reduce its contribution to U.S. coffers by roughly $10 billion due to a tax credit the company is claiming it incurred from the Gulf of Mexico oil spill.
The oil giant said Tuesday that it is incurring a charge of $32.2 billion from the Deepwater Horizon disaster response, and as such, it is claiming a $9.9 billion taxation credit.
Asked in a conference call Tuesday about whether it has discussed the tax credit with President Barack Obama's administration, BP's outgoing chief executive, Tony Hayward said: "We have followed the IRS regulations as they're currently written."
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But half of that may now come out of government coffers, and it could prove to be embarrassing for the Obama administration, presuming the president and Hayward did not discuss the issue at their recent meeting, according to David Desser, managing director of Juris Capital, which invests in corporate litigation. It was after that meeting that Hayward announced the $20 billion escrow fund.
"You would have thought in advance of that meeting, they would have thought of all of those issues," Desser said. "How do you unring that bell?"
"It looks to me like maybe the administration goofed here," he added.
