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

Obama: Alaskans Feel Signs of Climate Change

They're seeing bigger storm surges as sea ice melts, more wildfires, erosion of glaciers, shorelines More

1855 Slave Brochure Starkly Details Sale of Black Americans

Document lists entire families that were up for sale in New Orleans, offering graphic insight into the slavery trade More

Katrina Brought Enduring Changes to New Orleans

The city’s recovery is the result of the people and culture the city is famous for, as well as newcomers and start-up industries 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.
Nobel Prize Winner Malala Talks to VOAi
X
August 31, 2015 2:17 AM
Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video Nobel Prize Winner Malala Talks to VOA

Nobel Peace Prize winner Malala Yousafzai met with VOA's Deewa service in Washington Sunday to talk about women’s rights and unveil a trailer for her new documentary. VOA's Katherine Gypson has more.
Video

Video War, Drought Threaten Iraq's Marshlands

Iraq's southern wetlands are in crisis. These areas are the spawning ground for Gulf fisheries, a resting place for migrating wildfowl, and source of livelihood for fishermen and herders. Faith Lapidus has more.
Video

Video Colombians Flee Venezuela as Border Crisis Escalates

Hundreds of Colombians have fled Venezuela since last week, amid an escalating border crisis between the two countries. Last week, Venezuelan President Nicolas Maduro ordered the closure of a key border crossing after smugglers injured three Venezuelan soldiers and a civilian. The president also ordered the deportation of Colombians who are in Venezuela illegally. Zlatica Hoke reports.
Video

Video Rebuilding New Orleans' Music Scene

Ten years after Hurricane Katrina inundated New Orleans, threatening to wash away its vibrant musical heritage along with its neighborhoods, the beat goes on. As Bronwyn Benito and Faith Lapidus report, a Musicians' Village is preserving the city's unique sound.
Video

Video In Russia, Auto Industry in Tailspin

Industry insiders say country relies too heavily on imports as inflation cuts too many consumers out of the market. Daniel Schearf has more from Moscow.
Video

Video Scientist Calls Use of Fetal Tissue in Medical Research Essential

An anti-abortion group responsible for secret recordings of workers at a women's health care organization claims the workers shown are offering baby parts for sale, a charge the organization strongly denies. While the selling of fetal tissue is against the law in the United States, abortion and the use of donated fetal tissue for medical research are both legal. VOA’s Julie Taboh reports.
Video

Video Next to Iran, Climate at Forefront of Obama Agenda

President Barack Obama this week announced new initiatives aimed at making it easier for Americans to access renewable energy sources such as solar and wind. Obama is not slowing down when it comes to pushing through climate change measures, an issue he says is the greatest threat to the country’s national security. VOA correspondent Aru Pande has more from the White House.
Video

Video Arctic Draws International Competition for Oil

A new geopolitical “Great Game” is underway in earth’s northernmost region, the Arctic, where Russia has claimed a large area for resource development and President Barack Obama recently approved Shell Oil Company’s test-drilling project in an area under U.S. control. Greg Flakus reports.
Video

Video Philippine Maritime Police: Chinese Fishermen a Threat to Country’s Security

China and the Philippines both claim maritime rights in the South China Sea.  That includes the right to fish in those waters. Jason Strother reports on how the Philippines is catching Chinese nationals it says are illegal poachers. He has the story from Palawan province.
Video

Video China's Spratly Island Building Said to Light Up the Night 'Like A City'

Southeast Asian countries claim China has illegally seized territory in the Spratly islands. It is especially a concern for a Philippine mayor who says Beijing is occupying parts of his municipality. Jason Strother reports from the capital of Palawan province, Puerto Princesa.
Video

Video Ages-old Ice Reveals Secrets of Climate Change

Ice caps don't just exist at the world's poles. There are also tropical ice caps, and the largest sits atop the Peruvian Andes - but it is melting, quickly, and may be gone within the next 20 years. George Putic reports scientists are now rushing to take samples to get at the valuable information about climate change locked in the ice.

VOA Blogs