Oil giant BP plc (BP) (BP.L) spent over $93 million on advertising over the three-month period following the Gulf of Mexico oil spill, more than three times the amount spent by the company on ads in the same period last year, the U.S. House Energy and Commerce Committee said Wednesday.
The House energy committee had requested details on BP's spending on corporate advertising and marketing relating to the spill, and received a response on Monday.
Rep. Henry Waxman, Democrat-California and chairman of the energy committee, at the suggestion of Rep. Kathy Castor, Democrat - Florida, sent a letter to BP requesting details on the company's spending. BP has been criticized by some of the legislators for the company's public relation efforts after the leak, terming it as a "wrong priority".
In a letter sent to Castor on Wednesday, Waxman, and Bart Stupak, Democrat-Michigan and chairman of the investigations subcommittee, said that BP told the committee they have increased advertising expenditures to keep Gulf Coast residents informed of issues relating to the oil spill and to ensure transparency during the recovery process.
For the period covering April to the end of July 2010, BP spent $93.43 million on advertising. This is more than three times the amount the company spent on advertising during the same period of the prior year. BP's increased spending was almost entirely targeted at national and local newspapers and magazines and national and local television advertising.
BP in its letter has indicated it aired fewer television and radio spots during the April-July 2010 time period than during the prior-year period, but a higher percentage were national and longer, 60-second spots.
During the April-July 2010 period, BP ran local newspaper advertisements in 126 markets in 17 states, including the states directly impacted by the oil spill. In the same period last year, the company ran local market newspaper advertisements in two states and the District of Columbia.
BP also provided $89.5 million in grants to aid tourism promotion efforts in Florida, Alabama, Mississippi, and Louisiana following the oil spill. Some of these funds may have been used for advertising by each state or its tourism agency, the letter said.
Upon learning that BP has spent more than $93 million in advertising, Castor said, "BP's extensive advertising campaign that is solely focused on polishing its corporate image in the wake of the Deepwater Horizon blowout disaster is making people angry."
Castor added, "BP should be doing more to address the damage to the Gulf Coast tourism industry, fishing industry, and for researchers and for the taxpayers."
The oil spill is believed to have cost BP more than a whopping GBP 2.6 billion or US$4 billion until now, including containment costs, clean-up costs, relief well drilling, grants to the Gulf states, claims paid, and federal costs. As of August 23, there were 154,000 individual and business claims filed, against which $399 million have been disbursed.
BP closed Wednesday's regular trading session on the NYSE at $36.16, up $1.33 or 3.82% on a volume of 9.45 million shares. The stock has been trading in a range of $26.75-$62.38 in the past 52 weeks.
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