BP stock continues to fall since oil spill
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by Stephen Beard
BP shares fell another 15 percent in the London stock market this morning, marking the continued deterioration of its prices since the deep water drilling well exploded. Falling value means analysts see potential for a takeover by another oil company.
The sell-off followed the failure of the so-called “top kill” attempt to plug the massive oil leek in the Gulf of Mexico. BP has now lost more than third of of its stock market value since the oil rig disaster. Investors fear that costs are spiraling out of control, as experts say containment and clean-up of the spill could set the company back more than $3 billion. The company has already spent about $1 billion on disaster efforts.
Analyst Chris Skrebowski of Peak Oil Consulting says BP will likely emerge from this disaster as a smaller company. “It’s perfectly possible that it may have to chop bits off itself and sell them in order to meet the monumental costs that seem to coming down the road towards it.”
As a smaller firm, BP could be open to takeover. But Skreboweski says that’s unlikely to happen, as after this disaster regulators will be less keen on seeing an even bigger oil company.
Global markets continued to slide on Tuesday, but BNP Parisbas economist Julia Coronado said beyond the BP oil spill in the Gulf of Mexico, ongoing concerns about Europe’s fiscal problems and potential spillovers into the banking industry were a bigger concern to investors.
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