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Can BP survive?

andyandy

anthropomorphic ape
andyandy
Joined
Apr 30, 2006
Messages
8,377
A ridiculous question but one that's actually being asked:

The future of BP was in doubt tonight as the US government launched a criminal investigation into the Gulf of Mexico disaster and some commentators predicted the oil giant would face an operating ban in the country.

The US attorney general, Eric Holder, opened a criminal and civil probe into the worst oil spill in American history. Though he did not specify which companies would be in the cross-hairs of the investigation, the actions of BP are likely to come under close scrutiny.

"We will closely examine the actions of those involved in the spill. If we find evidence of illegal behaviour, we will be extremely forceful in our response," Holder said.

BP shares plummeted by 13% today, wiping £12bn off the company's value, as financial markets reacted to the news that oil is likely to continue spewing into the Gulf of Mexico for at least two more months. It was the worst one-day fall for 18 years for what was once Britain's most valuable company.

Political pressure is also mounting from the US, where BP's ongoing failure to stem the leak has led for calls to President Obama to take a more hardline approach.

Robert Reich, the former labour secretary under Bill Clinton, today called for BP's US operations to be seized by the government until the leak had been plugged. A group called Seize is planning demonstrations in 50 US cities this week and is calling for the company to be stripped of its assets.

Holder's criminal investigation was launched just hours after Barack Obama promised to prosecute any parties found to have broken the law in the lead up to the disaster.

The president dropped several threatening comments into a 10-minute address from the White House to mark the start of an independent commission he has convened to look into the causes of explosion at the Deepwater Horizon oil well.

City experts advised clients to sell shares following BP's admission over the weekend that the much vaunted "top kill" attempt to bung up the well had failed.

One stockbroker, Arbuthnot, captured the gloomy mood around the company, saying that the disaster "has a real possibility of breaking the company".

The key question, it added, was now "can BP survive?". It said that judging by the increasingly hostile rhetoric coming from the White House, BP might even be prevented from operating in the US, which could make it a takeover target.
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http://www.guardian.co.uk/environment/2010/jun/01/gulf-oil-spill-bp-future

I think the lesson is, if you're going to cause an ecological catastophe, do it somewhere like Nigeria rather than the most litigious country on earth...

I was thinking that given the recent falls BP might be a decent long term bet - but given the sabre rattling in the US maybe not.....

[and what's happened to the other two companies implicated in this? Surely there's liability for Halliburton et al? And what happens if they can't prove neglect? Are BP still liable?]
 
I think Exon is a much safer play-- it's gone down too, and I bet they will get their rigs in order if they are not in order.

XOM
 
Transocean and BP seem to be the main parties responsible as far I've heard.

Correct me if I'm wrong, but I thought that Halliburton's role was somewhat peripheral and the accident didn't have too much to do with their actions.

Can BP survive? Probably. But their profit margins will be lower for a few years. This is a company that has made between $16 and $22 billion in net profits after taxes in each of the last four years. (Link)
 
I wouldn't buy til the leak stops. Especially when it really hits the beaches; if it does. If I had cash, I would do some type of options strangle.
 
Frank: I just want to say one word to you - just one word.
Scrut: Yes sir.
Frank: Are you listening?
Scrut: Yes I am.
Frank: Dispersants.
Scrut: Exactly how do you mean?
Frank: There's a great future in dispersants. Think about it. Will you think about it?
 
Puppycow said:
Can BP survive? Probably. But their profit margins will be lower for a few years. This is a company that has made between $16 and $22 billion in net profits after taxes in each of the last four years. (Link)
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Yeah, it'll survive, but don't expect the nearly 10% dividend yield you get when looking at the current price and latest payout.
 
Puppycow said:
Transocean and BP seem to be the main parties responsible as far I've heard.

Correct me if I'm wrong, but I thought that Halliburton's role was somewhat peripheral and the accident didn't have too much to do with their actions.
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Halliburton poured the cement that failed making them the ones who “caused” the spill. Transocean made a lot of mistakes dealing with that failure and installed a faulty BoP. They could have prevented this from becoming s serious problem had they reacted properly, but bone of this would have mattered if the cement hadn’t failed.

BP had almost no involvement with operations so they are responsible only in the sense that it was their project. There are some allegations that they ok’d the use of the BoP even though they knew it was damaged but we don’t know how accurate this is.
 
There is a lot of play between continuing on as usual, and not surviving:

1) Takes a short term hit, people forget, others buy at a bargain price, and eventually BP is back as it was.

2) BP seems to be paying through the nose, but is being given direct or indirect help on the back end (suspension of taxes, favorable drilling legislation, insurance payoffs, other subsidies) that help offset its losses.

3) BP gets a sweet buy or merge deal with another company, leaving it with ownership, even if the name changes.

4) BP stays the same, and rebrands itself.

I suspect, whether the name, or the company, survives (too/important big to fail?), its oil production will not stop, though who owns what might change.
 
Denver said:
There is a lot of play between continuing on as usual, and not surviving:

1) Takes a short term hit, people forget, others buy at a bargain price, and eventually BP is back as it was.

2) BP seems to be paying through the nose, but is being given direct or indirect help on the back end (suspension of taxes, favorable drilling legislation, insurance payoffs, other subsidies) that help offset its losses.

3) BP gets a sweet buy or merge deal with another company, leaving it with ownership, even if the name changes.

4) BP stays the same, and rebrands itself.

I suspect, whether the name, or the company, survives (too/important big to fail?), its oil production will not stop, though who owns what might change.
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1 is the most likely result. 2 will come into play, because there will certainly be insurance money involved. 3 is possible if the share price drops far enough.
 
I think BP will be bought out eventually. The companies reputation is stained forever. Because of what has occurred, people will avoid buying their products. Government is launching a witch hunt against them that will last for years. How ever you look at it, the future for BP is grim, obviously. They will be bought out on the cheap, name changed, and become a division of one of the other oil firms.
 
Arrow said:
I think BP will be bought out eventually. The companies reputation is stained forever. Because of what has occurred, people will avoid buying their products. Government is launching a witch hunt against them that will last for years. How ever you look at it, the future for BP is grim, obviously. They will be bought out on the cheap, name changed, and become a division of one of the other oil firms.
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People said the same thing regarding Exxon about 20 years ago. How soon we forget.
 
BP or BP America?
At the moment, the entire BP group seems to be accepting shared responsibility and costs.
I don't know that they are obliged to. The prime reason corporations have divisions is to firewall liability.
 
It all depends who took the crunch decision to sink the rig and who authorised it.

There are blowouts every year in the Gulf and usually they just flare them off until either they can cap it or drill a relief well. They can't this time because they sunk the rig to put the fire out at which point you get a fractured pipe and oil in the water and that decision is the bit that's causing the disaster. The litigation will go on for years.

Steve
 
The Central Scrutinizer said:
People said the same thing regarding Exxon about 20 years ago. How soon we forget.
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We'll see. The BP disaster is different from the Exxon spill. The Exxon spill occurred in a remote area of the world. Not many people were personally touched by it. The current BP oil gusher has occurred in an area where millions live - my self included - and where the economic damage to other peoples lively hood can and will run into the billions. BP also advertised themselves as Beyond Petroleum no longer just British Petroleum. The image marketed was to show that BP was moving beyond oil, that they carried about the environment. With this ecological disaster, that image is destroyed. BP will always be remembered as one of the worst, dirty, corporate polluters in history. Exxon never presented themselves other than an oil company.
 
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