BP shares slumped more than 15 per cent yesterday after the British energy giant revealed over the weekend that its latest attempt to fix the US oil spill disaster had failed.
The company's share price also tumbled 15.2 per cent to 420 pence on news that response costs linked to the huge oil spill currently stand at about $990 million (€811 million).
The embattled company announced on Saturday that its risky "top kill" operation to plug the ruptured oil well in the Gulf of Mexico had failed, adding it would shift to a new strategy to cap the leak.
Engineers had spent days pumping heavy drilling fluid into the leaking well head on the ocean floor in a high-pressure bid to smother the gushing crude and ultimately seal the well with cement.
"The cost of the response to date amounts to about 990 million dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs," BP said in a statement yesterday.
"It is too early to quantify other potential costs and liabilities associated with the incident."
The latest costs estimate compared with a figure of $930 million that was given on Friday.
BP repeated yesterday that it will now proceed with a "containment" plan to place a cap over the leak. "Preparations are ongoing for deployment of the lower marine riser package cap containment system," the company said in a statement.
The group said that remotely operated vehicles were being used for preliminary operations for the plan. BP's market value has dropped by billions of dollars since the Deepwater Horizon oil rig, operated by BP and owned by US contractor Transocean, sank on April 22 - two days after a massive explosion killed 11 workers.
At least 20 million gallons of oil are feared to have already flooded into the Gulf since the rig exploded.
All attempts by BP to cap and siphon off some of the leaking oil have so far failed.
"BP (is) weighing heavily on the (London stock) market this morning as operation 'top kill' is pronounced a failure," said Spreadex trader Sam Wright.
"A second plan which involves redirecting the oil flow to a containment vessel could possibly take until August, as will the drilling of the two relief wells.
"As BP confirms the costs have hit $990 million, its shares are trading down 15 percent at 420 pence, weighing heavily on the FTSE."
However, shares later clawed back some ground to stand at 432.15 pence, down 12.66 per cent from the closing level on Friday.
London's FTSE 100 index of leading shares was down 1.59 per cent at 5,105.84 points in morning trade yesterday. The market was closed on Monday for a public holiday.