The stock market cost of BP’s Gulf of Mexico oil leak has topped the $US100 billion for companies directly involved, with tens of billions of dollars in market losses for other oil groups on top of that.

BP’s shares plunged in trading in Europe and the US, down more than 15% in the biggest fall in 18 years (the last one was when it was forced to make a surprise dividend cut in 1992).

By the close BP shares had lost 15% in New York trading and 13% in London.

Adding to the pressure news the US Government has started a criminal investigation into the leak. The probe will look at BP’s operations in the Gulf of Mexico, a move that could catch BHP Billiton, which is a partner in some of the fields in the area.

The US government vowed to use the full extent of the law to hold BP accountable, which has raised the stakes and has investors directly questioning the diminished oil giant’s ability to remain independent.

Since the accident happened April 20, (which resulted in 11 deaths and an oil leak of up to 19,000 barrels a day), BP shares have fallen nearly 40%, wiping out nearly $US70 billion in shareholder value. Before the accident the company had a market capitalisation of nearly $183 billion. Now it’s $114.3 billion.

Shares in other companies involved have tanked: Anardako (the other big shareholder in the well with a 25% stake, along with Mitsui of Japan), TransOcean, the driller, Halliburton, the services company, and Cameron International, the blow-out preventer manufacturer, have lost a collective $US40 billion in value since the disaster started.

Investors are increasingly concerned the clean-up costs, lawsuits, and added restrictions on drilling and production from the spill, now the worst in American history, will so badly damage BP’s earnings, that its outlook as an independent company is now in question.

Market reports said the measures of the risk that BP will default on its debts also rose sharply, pricing the company as a Triple B stock instead of the AA one it is now.

After the failure of the top kill and junk shots over the long weekend, BP is now trying to limit the amount of oil spewing into the Gulf by dropping a new containment cap to the top of the blow-out preventer, the collection of valves on the seabed that failed to stop the release of gas and oil on April 20, which in turned produced the fatal explosion on the rig.

Analysts in London and the US have produced estimates from $US4 billion to $US25 billion for the financial impact on the oil giant.

BP said overnight the costs linked to the huge oil spill have now risen to about $US990 million, up by $US60 million in just three days.

“‘The cost of the response to date amounts to about $US990 million, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs,” BP said in a statement. “It is too early to quantify other potential costs and liabilities associated with the incident.”

BP still has immense financial strength. The group generated $US27.7 billion in cash from operating activities during 2009, and at the first-quarter’s conclusion, it had a debt-to-equity ratio of just 19%. The annual dividend costs $US10.4 billion and it spends over $US20 billion on capital spending.

But the cash flow will fall because of the shutting of production from the Gulf field; cutting capital spending will not work because any cuts would be absorbed by the spending on the leak and the clean-up. The dividend would have to be cut or in the end, dropped. That in turn would see the senior management and some board members walk the plank.

So don’t be surprised if BP is forced to put its US assets into some sort of administration to try and quarantine the damage from the rest of the company.

BP, however, needs the US as 40% of the company’s business comes from there and especially the Gulf where it is the major producer, in particular from the newer deep-water areas.

And if BP is somehow damaged and can’t continue, what does that mean for BHP Billiton?

BP is the producer on some of BHP’s biggest producing fields, which are in the Gulf.

Investors might be better off asking BHP some hard questions about the Gulf and BP than fretting about the Australian resource tax. Restrictions and higher safety requirements will slash BHP’s production and profits from the Gulf fields.