This week marked the first anniversary of the explosion at BP’s Deepwater Horizon rig in the Gulf of Mexico. The accident killed 11 people and caused America’s worst-ever oil spill. BP’s market value plummeted by 50% after the spill before recovering. But shareholders are still around £35bn poorer than before the accident.
What the commentators said
Until recently, BP “seemed to be making a textbook recovery” from the disaster, said Guy Chazan in The Wall Street Journal. In January it announced a tie-up with Russia’s Rosneft to explore the Arctic, which holds vast reserves. But oligarchs who own half of BP’s existing joint venture in Russia, TNK-BP, managed to block the deal in court. This is “humbling” for chief executive Bob Dudley. He had trumpeted the Rosneft deal as proof of “BP’s Lazarus-like revival”.
Resolving the stand-off with the TNK oligarchs “almost certainly involves” BP buying them out, said Lex in the FT. It won’t come cheap, given that TNK-BP accounts for a fifth of BP’s oil reserves. Dudley “might have to find at least $30bn” to buy the oligarchs out. “Steep…[but] it looks do-able.” Nor is it yet clear what the final bill for the Gulf spill will be. Indeed, this could “remain uncertain for years to come”, according to rating agency Moody’s.
BP has set aside $41bn to cover all costs associated with the disaster; Moody’s reckons this may be a 50% underestimate. Over the past year, said Damian Reece in The Daily Telegraph, BP has become “synonymous with risk in a way its competitors are not”.
BP: 469p; 12m change -30%