BP Scores $10B Tax Credit by Offsetting Cash

While BP took a $17 billion loss in the second quarter, the financial news isn't all bad for the beleaguered oil giant.

That's because the amount the oil company set aside to cover the costs of the oil spill will end up saving the oil giant $10 billion in U.S taxes, according to an msnbc.com report.

BP set aside $32.2 billion for the cost of the spill, a charge that led to the $17 billion quarterly loss. But according to the msnbc.com report, BP plans to offset the entire cost of the spill against its tax bill, which will slash its U.S. taxes by $10 billion.

Special Section: Disaster in the Gulf

The $32.2 billion pretax provision was set up to pay for cleaning up the spill, compensating victims and paying fines. The $10 billion tax credit means the beleaguered oil company's net loss would be roughly $22 billion.

BP Posts Record $17B Loss in 2nd Quarter

According to msnbc.com, analysts said BP's tax break could stoke more ire among U.S. taxpayers and politicians but a company spokesman defended the move.

"This is just normal practice. If you declare an income, you have to pay tax on it - it's the way tax laws are set up," BP spokesman Toby Odone told msnbc.com. "We will pay less in tax because we are earning less, as you would as an individual if you were earning less."