BP shares rise on Gulf settlement news

FILE - In this April 21, 2010 photo provided by the U.S. Coast Guard, fire boat response crews spray water on the burning remnants of BP's Deepwater Horizon offshore oil rig. The gargantuan legal bill for the 2010 catastrophic oil spill in the Gulf of Mexico is coming due for BP as a federal trial opens Monday, Feb. 27, 2012 to determine the companyâ??s liability for the blowout of its Macondo well. On the cusp of trial, phalanxes of lawyers, company officials and state officials spent the final hours in high-stakes settlement talks that law experts believed could still yield a deal right before the courtroom doors open Monday morning.
AP Photo/US Coast Guard, File

LONDON - Shares in BP PLC (BP) are trading near two-year highs in the wake of the oil company's announcement that it had reached a settlement with victims of the massive Gulf of Mexico oil spill.

BP shares were up 1.6 percent at 504.4 pence in midday trading in London Monday. BP shares are at their highest level since since May 2010.

BP said Friday it expects to pay out at least $7.8 billion as part of the settlement. It expects the money to come from the $20 billion compensation fund that it has set up.

BP expects Gulf spill deal to cost $7.8B

Jonathan Jackson, head of equities at Killik & Co. in London, says the news isn't the end of BP's problems but that "it does provide increased visibility over its potential liability and significant progress toward resolving the issues."