BP shares dropped as much as 9% in London on Friday, as an analyst suggested the company needs to sell stock to assure counter-parties that it has the financial health to withstand the growing cost of cleaning up the Gulf of Mexico oil spill.

As the Macondo well continues to leak oil, Nomura analyst Alastair Syme said the company's funding could be threatened.

Syme said in a note to clients that the roughly $15 billion of current liquidity looks adequate to deal with committed acquisitions, spill cleanup costs and the phased funding of the $20 billion escrow account.

"But a sharp rise in liabilities or alternatively a collapse in oil prices could leave the funding much tighter," Syme said. "Consider too that BP has an estimated $2 billion to $2.5 billion of one-year commercial paper to roll over, needed to fund day-to-day trading activities and working capital, which will likely be much harder (and more expensive) to do in this environment."

Issuing debt is expensive, and selling off assets takes time--so the analyst suggests the company sells roughly $10 billion of equity, backed possibly by sovereign wealth funds.

In late morning London trade, BP (BP) shares slumped 7%, sending the stock to a 14-year low. Credit-default swaps on the oil giant widened sharply as well, reflecting bond market worries.

The company Friday said costs of cleaning up the spill had grown to $2.35 billion.

Besides the worries about funding and cleanup costs, jitters over the onset of hurricane season also were weighing as hurricanes and tropical storms could make it more difficult for BP to cap the spill.

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