Published: Dec 29, 2010 5:34 PM EST
Updated: Dec 29, 2010 2:34 PM EST

NEW YORK (AP) - As the Gulf oil spill gushed out of control, BP's financial liabilities seemed big enough to sink the company. No more.

Cleanup, fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has publicly estimated, according to an Associated Press analysis. But they'll be far below the highest estimates made last summer by legal experts and prominent Wall Street banks.

BP will survive the worst oil spill in U.S. history for several key reasons: it has little debt; its global businesses are forecast to generate $26 billion next year in cash flow from operations; the environmental impact of the spill isn't as bad as feared; and the government seems unlikely to ban BP from Gulf drilling.

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