BP Oil Spill Share Price
For many private and institutional shareholders, the BP oil spill share price fiasco is a nightmare.
And before the words BP oil spill resonated in the world’s media and around the dealing rooms, this was one company that truly deserved the tag blue-chip. Backing BP was almost a dead cert.
BP was not only one of Britain’s biggest company, it was one of the world’s biggest companies. Then, on 20 April, the world awoke to the BP oil spill and the share price, initially little worried, began a trip south.
The problem for the London Stock Exchange is that BP’s payout represented 15% of all dividends shelled out in 2009. So pensioners particularly are being hard hit, because many of the countries large pension funds hold huge positions in BP. Now they are facing mounting losses. The irony is of course, that with BP being 39% owned by Americans (UK shareholders account for 40%), the BP oil spill worries are not just being faced on one side of the pond.
President Obama and the senators on Capitol Hill might be justified in throwing as much verbal mud at BP chief executive officer’s Tony Hayward as his team of engineers are trying to physically throw rubbish at the broken well-head to block it, but if the company is attacked to the point of bankruptcy, then US investors are going to feel as hard hit as their British counterparts.
Since the explosion on the Deepwater Horizon rig, the BP oil spill share price has dropped from just shy of 650p, to now 357p (at time of writing). Which means that the company’s value has nearly been halved. What’s more, BP was always a highly rated credit risk, but has just seen its Moody’s credit rating fall to A2 from Aa2. Rating agency Moody is just one of the main agencies who have all downgraded BP stock, mainly the BP oil spill share price tumult is likely to have a negative impact on the company’s future for so many years.
The company tried to make matters better by at least quantifying its likely losses over the BP oil spill calamity, putting the cost of clean-up at $20 billion. But some experts are now putting that figure in doubt and say that the cost could reach as high as an incredible $100 billion. Obama and his administration, and most of the US politicians, now have a whipping boy for all sorts of issues and BP could almost be bled dry by years of compensation claims and litigation, in one of the world’s most litigious countries.
And such is the magnitude of the BP oil spill fiasco, that it is now said that BP, alongside its financial advisors, is working hard to raise contingency funds. The City has been reporting that BP is looking to sell some $10 billion of assets and raise nearly the same in loans.
Whichever way you look at it, the BP oil spill has been an unmitigating disaster for Britain’s largest corporate entity and even if it does survive, it will never be the same colossus as it was just days before 20 April, 2010.
Guest Article by Neil Camp
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My name is Alan Potts and I'm the Editor of the BUYability web site and Managing Director of BUYability Limited. You can connect with me or keep up to date with new posts on this blog via the following social media sites: 
