BP Downgraded By Fitch Over Concerns About Spill Cleanup Costs

08/15/2010 05:12 am ET | Updated May 25, 2011

LONDON — An influential ratings agency downgraded BP on Tuesday because of worries about the continuing Gulf of Mexico spill, sending the oil company's shares to a new low.

Shares in BP fell below 350 pence for the first time since the oil rig disaster, dropping 2.5 percent to 346 pence ($5.12) by midafternoon on the London Stock Exchange.

Fitch Ratings downgraded BP's long-term issuer default rating and senior unsecured rating to BBB from AA.

"The scale of today's rating action has been partly driven by the increased risk that the balance between long-term and near-term cost payments may now be skewed much more heavily toward the near term than previously anticipated," Fitch said.

The ratings company said it was concerned by reports from U.S. government scientists that the volume of the spill was significantly larger than previously indicated, and it was also worried by pressure from U.S. officials on BP to pay billions of dollars into an escrow account to guarantee payment of cleanup costs.

"Both of these events have a direct bearing on BP's fundamental financial flexibility," Fitch said.

On Monday, shares fell 9 percent in London and 10 percent in New York as the company remained under intense pressure to stop the catastrophic leak of oil from a well in the Gulf of Mexico.

BP has lost 45 percent of its value since the April 20 explosion at the Deepwater Horizon rig in the Gulf of Mexico that killed 11 workers and set off the worst oil spill in history.