While fundamentals spell more upside…
UK’s oil major BP will…
The Japanese government panel overseeing Tokyo Electric Power Co.'s financial standing has estimated that the utility could face more than $52 billion in compensation costs related to the 11 March nuclear crisis at TEPCO’s Fukushima No. 1 power plant.
Panel sources, speaking on condition of anonymity said that the committee calculated the figure based on government compensation guidelines, but the final amount could increase as discussions continue on issues including as how far TEPCO should bear the costs to compensate people who have voluntarily evacuated from around the radiation-leaking plant.
Following the accident the Japanese government established a 12.6 mile evacuation zone around the stricken reactor complex, The Japan Times reported.
The government panel, headed by lawyer Kazuhiko Shimokobe, has calculated that TEPCO could avoid deficits without raising electricity rates if it is allowed to restart reactors at the Kashiwazaki-Kariwa power plant in Niigata Prefecture in the summer of 2012, adding that that a rise in electricity rates would be unavoidable if TEPCO is subjected to delays in restarting the reactors, accumulating liabilities that could overwhelm TEPCO with debt.
Further adding to the fiscal uncertainty, the panel’s assessment doesn't include the costs for decommissioning the Fukushima reactors.
By. Joao Peixe, Deputy Editor OilPrice.com
Joao is a writer for Oilprice.com