BP has finally managed to stem a small part of the flow from the deep sea well in the Gulf Of Mexico, but the spill, now thought to be four times worse than the Exxon Valdez disaster, continued to fuel a political storm this week. Barack Obama launched an attack on CEO Tony Hayward, saying he’d have fired him for a series of ill-judged comments.
He has also criticised BP for considering paying a dividend while the spill is unresolved. The White House warned BP it faced “many billions of dollars” in penalties in addition to the ongoing clean-up costs, which are already at $1.2bn. The shares have now slipped by almost 40% since the spill began in late April.
What the commentators said
The anti-British demonisation of BP is getting out of hand, said Bruce Anderson in The Independent. It’s been ten years since the firm called itself British Petroleum, yet the president constantly uses the old name. To listen to Obama in the past few weeks, “one might have thought that BP was run by George III”. The trouble, as the Financial Times pointed out, is that Obama “is under huge pressure to show that this is not some rerun of Hurricane Katrina”, especially with the mid-term elections coming up.
And Hayward has helped turn the world against BP with “too many slips”, said Christopher Hughes on Breakingviews. He was overoptimistic about a series of ultimately unsuccessful plans for plugging the leak, initially played down the spill’s environmental impact, and last week said he “wanted his life back”.
BP’s shaky safety record isn’t helping, said Danny Fortson in The Sunday Times. A spate of accidents in the past few years, and the 760 “egregious” violations of safety standards in the three years to April identified by America’s industrial safety watchdog, leave it way behind its rivals on this front. The worry is that BP may eventually be forced to sell out of the US, which accounts for a third of its earnings, and could succumb to an opportunistic bid. It’s “fighting for survival”.
BP: 394p; 12m change -22%