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

Multimedia Obama Defends Immigration Action

Obama says with his executive action on immigration, enforcement resources will be focused on 'felons, not families; criminals, not children' More

US-Led Airstrikes in Syria Kill Over 900: Monitoring Group

British-based Syrian Observatory for Human Rights says the toll includes more than 50 civilians, five of them women and eight of them children More

Report: Obama Broadens US Combat Role in Afghanistan

The New York Times says resident Barack Obama has signed a classified order extending the role of US troops in Afghanistan for another year 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.
New Skateboard Defies Gravityi
X
November 21, 2014 5:07 AM
A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Mexico Protests Escalate Over Disappearances

Protests in Mexico over 43 students missing since September continue to escalate, reflecting growing anger among Mexicans about a political system they view as corrupt, and increasingly tainted by the drug trade. Mounting outrage over the disappearances is now focused on the government of President Enrique Pena Nieto, accused of not doing enough to end insecurity in the country. More from VOA's Victoria Macchi.
Video

Video US Senate Votes Down Controversial Oil Pipeline - For Now

The U.S. Senate has rejected construction of a controversial pipeline to transport Canadian oil to American refineries. The $5 billion project still could be approved next year, but it faces a possible veto by President Barack Obama. As VOA’s Michael Bowman reports, the pipeline has exposed deep divisions in Congress about America’s energy future.
Video

Video Can Minsk Cease-fire Agreement Hold?

Growing tensions between government troops and separatists in eastern Ukraine further threaten a cease-fire agreement reached two months ago in the Belarusian capital of Minsk. Critics of U.S. policy in Ukraine say it is time the Obama administration gives up on that much-violated cease-fire and moves toward a new deal with Russia. VOA's Scott Stearns has more.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.
Video

Video Ferguson Church Grapples with Race Relations

Many white residents of Ferguson, Missouri, say they chose to live there because of the American Midwest community's diversity. So, they were shocked when a white police officer killed an unarmed black teenager in August – and shaken by the resulting protests and violence. Some local churches are leading conversations on how to go forward. VOA’s Ayesha Tanzeem reports.

All About America

AppleAndroid