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Posts on ‘June 2nd, 2010’

Gulf oil spill: Will Deepwater sink the 101-year-old BP?

guardian.co.uk

Mud-smeared BP logos, boycotts, and an almost halved market value indicate deep disgust over the handling of the oil slick

Andrew Clark in New York: Wednesday 2 June 2010 17.37 BST 

At a service station in downtown Manhattan, the British company’s green and yellow logo has been defaced with huge brown smears of mud. Protesters clad as oil-soaked mermaids have occupied garage forecourts, anti-BP demonstrations are taking place from Los Angeles to Florida, and a boycott BP campaign is creating a buzz on the internet.

BP’s name is, quite simply, dirt. Americans are disgusted with the once proud London-based energy company.

As political leaders threaten criminal prosecution and possible seizure of the company’s assets, and environmentalists bay for blood, BP’s stock is plummeting: it has fallen by a third since the Deepwater Horizon rig caught fire on 20 April, causing the worst oil slick in US history. In financial circles, questions are growing about whether BP can salvage its reputation in the US and whether the company can survive as an independent entity at all. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Will BP Be Acquired? A Few Things to Think About

THE WALL STREET JOURNAL. BLOGS

JUNE 2, 2010 1.52 PM ET

By Michael Corkery

BP may be a bargain right now. It has lost 36% of its value, some $74.4 billion in all since the oil spill began on April 20.

With a total market cap of $117 billion, BP is now near the bottom of the heap of the world’s five major energy companies. Exxon, by comparison, has a market cap of $281 billion. Total S.A., which had long been in BP’s rear view mirror, is catching up with a value of $103 billion.

So why wouldn’t now be a good time for one of those majors to make a play for BP? There’s no denying that the company has an environmental disaster on its hands. But BP is one of the crown jewels of the energy world, with assets in more than 100 countries, $18.3 billion of reserves and $239 billion in revenues last year. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

BP’s share price plunge spurs speculation over its future

guardian.co.uk home

Analysts question BP’s ability to pay dividends

Terry Macalister Wednesday 2 June 2010 18.22 BST

Tony Hayward at the BP command centre in Houston last week. Photograph: Reuters

The survival of BP as an independent company was being openly discussed in the City today as the share price continued to tumble and its credit risk soared in the wake of its failed well-capping in the Gulf of Mexico.

Britain’s biggest oil company was said to have started merger talks with arch rival Shell in 2007 in the wake of Texas City oil refinery explosion of 2005, in which 15 people were killed. There were also some discussions in 2002 but nothing came of them. Analysts are now wondering whether merger talks could start up again as BP’s future ability to pay dividends to shareholders is questioned and its credibility in America, which provides 40% of its income, plummets. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

If you still hold BP stock, cut your losses and get out

BP has already far eclipsed Goldman Sachs as the most hated company in America.

Seeking Alpha

June 02, 2010

BP’s worst-case scenario from a few weeks ago is now a reality, and things are still going downhill fast. Let’s first review the latest facts, and then discuss their significance for BP shareholders.

  • As of last Friday, BP’s global market capitalization (not just on the NYSE) had fallen by 25 percent, or around $30 billion, since April 20th. This does not include Tuesday’s BP crash of 15 percent on the NYSE and 13 percent on the LSE.
  • BP is now under both civil and criminal investigation by the U.S. Attorney General.
  • British financial pundits are now openly discussing the possibility that BP will be sued and fined into insolvency, or become the victim of a hostile takeover due to its plummeting share price. Some have also suggested that the company could find itself banned from operating in the U.S.
  • Even if it survives, BP will likely be unable to pay dividends for years.
  • Coast Guard Admiral Thad Allen has just revealed that BP has given up trying to plug its Gulf of Mexico leak. Some oil may yet be sucked off via temporary measures, but a permanent solution will have to wait until August at the earliest.
  • After claiming for weeks that BP’s damaged riser was releasing just 5000 barrels per day, Washington has fessed up that the leak is spewing between 12,000 and 19,000 barrels per day, although many scientists not involved with this fiasco are saying that it could be much more. (The above figures refer to leaked crude oil alone, not the natural gas that comes with it).
  • Going by the official estimates, BP has now released between 480,000 and 760,000 barrels of crude into the Gulf, and is on track to spew up to 2.2 million barrels by mid-August, assuming the present best-case scenario that the leak can be stopped entirely at that time. This will be up to nine times worse than the Exxon Valdez disaster.
  • BP has already spent over $1 billion on the cleanup and mitigation effort, with no end in sight.
  • BP has already far eclipsed Goldman Sachs as the most hated company in America.
  • Due to the unprecedented, massive use of chemical dispersants, hundreds and possibly thousands of cubic (not square) miles of sub-surface Gulf water have been turned into oil-contaminated dead zones. No one can reliably guess the ecological and economic effects of this disaster. In terms of liability and political risk, BP is in totally uncharted territory.

So those are the latest facts. Now, what does it mean for the stock?

BP shareholders had ample warnings—some of them posted right here on Seeking Alpha—that continuing to hold BP stock is not advisable. Having missed the warning signs, some now think that buying the latest “dip” (to put it mildly) is a good idea. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Are BP’s days numbered?

Chron.com

BP’s stock price may make it takeover bait

By LOREN STEFFY Copyright 2010 Houston Chronicle

June 1, 2010, 10:39PM

Are BP’s days numbered?

That question bubbles up from beneath new cost estimates and growing market skepticism as the company’s latest attempt to cap a runaway well a mile below the Gulf of Mexico failed last week.

The British-based oil giant has been hammered by investors, regulators, the public and even the U.S. president, and while it’s trying yet again to stop the oil flow, it could be the end of summer before it succeeds.

A few weeks ago, it appeared the disaster might just result in regulatory backlash and cost CEO Tony Hayward his job. Now, it’s the future of BP as a stand-alone company that may be in jeopardy. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

BP’s Future at Risk as Share Plunge Fuels Takeover Speculation

BusinessWeek Logo

By Brian Swint and Stanley Reed

June 2 (Bloomberg) — BP Plc’s failure to stop an oil leak from spewing millions of gallons of crude into the Gulf of Mexico may leave the biggest oil and gas producer in the U.S. in a fight to stay independent.

BP shares have plunged 34 percent since the Deepwater Horizon drilling rig leased by the company exploded on April 20, wiping more than 40 billion pounds ($58 billion) from the company’s value. That may make BP cheap enough to attract acquisition interest, investors said. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

FEARS FOR BP AFTER OIL LEAK AND DROP IN COMPANY SHARES

Express.co.uk - Home of the Daily and Sunday Express Express - Breaking news, sport and showbiz from the World's Greatest Newspaper

Wednesday June 2,2010

BP is facing growing speculation it will be vulnerable to a takeover bid as uncertainties and costs mount in the wake of the oil giant’s latest failure to halt the devastating oil spill in the Gulf of Mexico.

The company’s shares plummeted by 64¾p to 430p, wiping £12billion off its market value, prompting analysts to warn the dividend was under threat and the group could fall prey to a rival, such as Exxon Mobil, Conoco, Chevron or even Royal Dutch Shell.

BP said yesterday the spill cost had risen to $990million (£680million) but is likely to grow significantly as the company continues to combat the leak and faces the prospect of litigation and punitive fines in the United States. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.

Oil spill sparks criminal probe

REUTERS

La./LONDON (Reuters) – BP Plc faced a grim future on Tuesday as its failure to stop a Gulf of Mexico oil spill prompted a plunge in the energy giant’s shares and the Obama administration said it opened a criminal investigation.

President Barack Obama, struggling to get on top of the worst oil spill in U.S. history, vowed an overhaul of U.S. laws and regulations needed to prevent a repeat of the April 20 rig explosion that killed 11 people and triggered the spill.

A mile below the ocean surface, BP began a new strategy to tackle the six-week-old drama, using underwater robots to cut away extraneous pipes before trying to contain the leaking oil and channel it to a ship on the surface. read more

royaldutchshellplc.com and its sister websites royaldutchshellgroup.com, shellenergy.website, shellnazihistory.com, royaldutchshell.website, johndonovan.website, shellnews.net and shell2004.com are all owned by John Donovan. There is also a Wikipedia article.
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