Mitsui & Co: Difficult To Specify Gulf Of Mexico Oil Leak Costs

Mitsui & Co. (8031.TO) said Monday it is difficult at this point to estimate costs to be accrued from the massive oil spill in the U.S. Gulf of Mexico. Mitsui & Co.'s unit Mitsui Oil Exploration Co. has a 10% stake in the offshore block, where hydrocarbons have been leaking after a drilling rig burned and sank in late April.

The latest attempt to stop the deepwater spill--using a remote robotic arm to stuff golf balls and assorted debris into the gash in the seafloor and then capping it with heavy mud and cement--didn't work. BP PLC (BP), the operator, said Sunday it would try to contain the flow with a new type of cap that would siphon oil to the surface rather than plugging the undersea puncture wound, but the operation could initially increase flows and had never been tried before in 1,500 meters of water.

"There are many parties involved besides shareholders, while work at the site is going on," a spokesman of Mitsui & Co. said.

Mitsui Oil Exploration has not sent its own staff there, but it is ready to do so upon request, the spokesman said.

"A likely thing is to post expected costs beforehand in this fiscal year's earnings," said Hidetoshi Shioda, analyst with Mizuho Securities Co.

Still, it would be hard to generate cost projections as they may include not only the clean up but also compensation to industries like fisheries and tourism. Therefore, Mitsui & Co. will have to mention future risks of the costs in its financial statements instead, Shioda said.

Mitsui & Co. holds 70% of Mitsui Oil Exploration, while Japan's Ministry of Economy, Trade and Industry owns 20%. The reminder is held by several other Japanese companies.

-By Mari Iwata, Dow Jones Newswires; 813-6269-2798; mari.iwata@dowjones.com

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