Thursday, 13 January 2011

BP: 2 Steps forward 1 Step back!

Another eventful few days for BP with both good and bad news pulling on the shares but recovery momentum winning out.
First out of the traps and carrying over from the weekend was news that the Alaskan pipeline that delivers approx. 12% of US requirement has had to be shut down due to a major leak.
BP, the 47% majority shareholder in the operation saw its share price lose 1% of their value on the back of this potential hit to earnings, previous problems with this line, and increasing scrutiny on the commitment to health and safety in the Oil and Gas industry.
I have yet to see confirmation that repairs have been made and when the pipeline might be operational again operations but the situation has given rise to further increases in the spot price for a barrel of crude to around $91 per barrel.
Following this news, the US commission report on the Gulf Oil spill was published and has underlined BP's culpability as well as Haliburton and Transocean (7 of the 9 affecting decisions down to BP) but also points the finger at the wider culture of profits over safety within the Oil and Gas Industry. The report seems to steer clear of declaring gross negligence by BP which can only be positive news given the lawsuit against BP but does demand tougher safety regulations going forward (and quite rightly so).
This potentially more positive outlook appears to be supporting BP's share price recovery which currently stands at 508.5p as at Thurs 12.39pm.

Telegraph article link - Alaskan Oil Leak

Guardian article link - White house commission report

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