On Tuesday BP said that fourth-quarter profit fell almost 80 percent, dragged down by payouts related to compensation over the Gulf of Mexico oil spill. According to data released by the company net profit fell to $1.62 billion in the last three months of 2012, down from $7.69 billion in the same period the year before.

The company has been struggling with political, financial and legal fallout ever since the April 2010 explosion, which caused the worst offshore oil spill in US history.
The Gulf of Mexico disaster might cost BP more than expected as new claims more than double the $42.2 billion set aside to deal with the matter. BP says the additional claims are “substantially overstated”.

The new claims amount to $34bn, and could prove to be another hard blow to BP’s profits which were reduced by nearly half in 2012 after the company had to pay fines for the disaster by selling assets.

The additional claims were disclosed in the company’s financial results on Tuesday, and come from state and local government on the US Gulf Coast for economic and property damages from the Macondo oil spill. The claims were made last month by Alabama, Mississippi, Florida, Louisiana and other local governments, according to BP.