News / Europe

Can BP Survive Gulf of Mexico Catastrophe?

Can BP Survive Gulf of Mexico Catastrophe?
Can BP Survive Gulf of Mexico Catastrophe?

Multimedia

Following a catastrophic oil spill in the Gulf of Mexico, BP's reputation in the United States has been badly tarnished.

BP once stood for "British Petroleum'"  The company rebranded itself as simply BP in 1998, but that has not stopped many Americans from using the old name.

Even the U.S. president has referred pointedly to the company as "British Petroleum," and many in Britain have taken it as an attack against their country.

BP is one of Britain's largest companies.  Its founders began oil explorations in modern-day Iran more than 100 years ago.  Now it operates in 80 countries around the world.

Jeremy Batstone-Carr, head of research at stockbroker Charles Stanley, says BP is now a global company.    

"BP is a British company, but it is a multi-national company as well," said Jeremy Batstone-Carr. "It owns substantial businesses in the United States.  It has substantial assets in Asia and in Russia, so it is an extremely important global economy."

But, as tens of thousands of barrels of oil continue to flow daily into the Gulf of Mexico, killing wildlife, damaging the environment and ruining livelihoods, the company is suffering as well.

BP has already spent over $1 billion on the clean-up operation .  That sum pales in comparison to the planned $20 billion fund to compensate victims of the disaster.

The company's reputation is also in tatters.  Lawmakers in the U.S. Congress have accused BP of taking shortcuts that raised the risk of disaster and of being dishonest about the scale of the problem.

Even before this oil leak, BP's safety policies were in doubt following major accidents in Alaska and Texas in the past decade.  And now many Americans say they have had enough.

Batstone-Carr says he thinks BP is strong enough to sustain this double-blow to its bank balance and its reputation, but the ultimate outcome is still unknown.

"I don't think at this stage, nobody knows whether BP will be forced to be broken up, whether it might actually end up being so weakened that it falls into the arms of somebody else," he said. "My suspicion is at this moment in time, that that won't happen.  But there is a lot of uncertainty, and of course that is manifest in the share price which has lost about 40 percent of its value over the course of the past six or seven weeks."

Alan Smith, chief executive of the financial planning firm Capital Asset, says with BP's value almost cut in half, it is not just the people at the top who will be hit.  He says it is worrying for the millions of Britons who are invested in the company.

"BP is hugely important to the British economy in general and particularly to private interests and members of pension schemes, most of whom have got exposure to BP just simply due to the size as an institution," said Alan Smith. "So their shares tend to be very widely owned and widely held."

Under pressure from U.S. President Barack Obama, BP bosses have decided not to pay out dividends to their shareholders this year.

Smith says many people may depend on those payments.

"How that affects the individual who owns BP shares and relies upon those to generate income, means that they're not going to have any income at all during this month," he said. "Let's hope that that is a short term, temporary situation and that BP will revert to paying their dividends out in full later in the year."

And he says it is not just Britons whose bank balance may suffer.

"Although it is quoted on the London Stock Exchange and is generally perceived to be a British company, BP is definitely much more an international company of huge importance to the American economy and the American employees," said Smith. "BP actually when they merged with Amoco some years ago, the profile of the employees within the organization changed significantly and now for every British employee of BP there are two and a half Americans working for BP."

But, back in the Gulf of Mexico, the oil is still gushing out.  And until BP finds a way to stem the flow, no one can estimate the full effect of this disaster on BP, its shareholders, or employees.  

You May Like

Koreas Mark 61st Anniversary of War Armistice

Muted observances on both sides of heavily-armed Demilitarized Zone that separates two decades-long enemies More

Judge Declares Washington DC Ban on Public Handguns Unconstitutional

Ruling overturns capital city's prohibition on carrying guns in public More

Pricey Hepatitis C Drug Draws Criticism

Activists are using the International AIDS Conference to criticize drug companies for charging high prices for life-saving therapies More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Students in Business for Themselvesi
X
Mike O'Sullivan
July 26, 2014 11:04 AM
They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Students in Business for Themselves

They're only high school students, but they are making accessories for shoes, fabricating backpacks and doing product photography - all through their own businesses. It's the result of a partnership between a non-profit organization that teaches entrepreneurship and their schools. VOA's Mike O'Sullivan and Deyane Moses met the budding entrepreneurs near Los Angeles.
Video

Video Astronauts Train in Underwater Lab

In the world’s only underwater laboratory, four U.S. astronauts train for a planned visit to an asteroid. The lab - called Aquarius- is located five kilometers off Key Largo, in southern Florida. Living in close quarters and making excursions only into the surrounding ocean, they try to simulate the daily routine of a crew that will someday travel to collect samples of a rock orbiting far away from earth. VOA’s George Putic has more.
Video

Video Not Even Monks Spared From Thailand’s Junta-Backed Morality Push

With Thailand’s military government firmly in control after May’s bloodless coup, authorities are carrying out plans they say are aimed at restoring discipline, morality and patriotism to all Thais. The measures include a crackdown on illegal gambling, education reforms to promote students’ moral development, and a new 24-hour phone hotline for citizens to report misbehaving monks. Steve Sandford reports from Bangkok.
Video

Video Virtual Program Teaches Farming Skills

In a fast-changing world beset by unpredictable climate conditions, farmers cannot afford to ignore new technology. Researchers in Australia are developing an online virtual world program to share information about climate change and more sustainable farming techniques for sugar cane growers. As VOA's Zlatica Hoke reports, the idea is to create a wider support network for farmers.
Video

Video Airline Expert: Missile will Show Signature on Debris

The debris field from Malaysia Airlines Flight 17 is spread over a 21-kilometer radius in eastern Ukraine. It is expected to take investigators months to sort through the airplane pieces to learn about the missile that brought down the jetliner and who fired it. VOAs Carolyn Presutti explains how this work will be done.
Video

Video Treatment for Childhood Epilepsy Heats up Medical Marijuana Debate

In the United States, marijuana is classed as an illegal drug by the federal government. But nearly half the states have legalized it, to some degree. Proponents say some strains of marijuana might have exceptional health benefits, for treating pain or inflammation in chronic conditions such as cancer, multiple sclerosis and epilepsy. Shelley Schlender reports on a strain of medical marijuana developed in Colorado that is reputed to reduce seizures in childhood epilepsy
Video

Video Airbus Adds Metal 3D Printed Parts to New Jets

By the end of this year, European aircraft manufacturing consortium Airbus plans to deliver the first of its new, extra-wide-body passenger jets, the A350-XWB. Among other technological innovations, the new plane will also incorporate metal parts made in a 3-D printer. VOA's George Putic has more.
Video

Video AIDS Conference Welcomes Exciting Developments in HIV Treatment, Prevention

Significant strides have been made in recent years toward the treatment and prevention of HIV, the virus that causes AIDS. This year, at the International AIDS Conference, the AIDS community welcomed progress on a new pill that may prevent transmission of the deadly virus. VOA’s Anita Powell reports from Melbourne, Australia.
Video

Video IAEA: Iran Turns its Enriched Uranium Into Less Harmful Form

Iran has converted its stockpiles of enriched uranium into a less dangerous form that is more difficult to use for nuclear weapons, according to the United Nations’ Atomic Energy Agency. The move complies with an interim deal reached with Western powers on Iran's nuclear program last year, in exchange for easing of sanctions. Henry Ridgwell reports for VOA from London.

AppleAndroid