BP CEO Hayward to ease shareholder concerns over oil leak
Share Now on:
by Stephen Beard
BP CEO Tony Hayward is holding an emergency conference with shareholders this week amidst a U.S. Justice Department criminal probe into the company and cost concerns over easing the BP oil crisis in the Gulf of Mexico. Hayward believes fears surrouding BP’s balance sheet are overstated and that BP has enough cash to pay investors their dividends in full and still have $8 billion left over.
Analyst Nick McGregor with brokers Redmayne Bentley says while BP may survive the oil crisis, Hayward will likely not be able to keep his job. “At the end of all this, once it’s finished, I do think it will probably be the case that this will draw a line under Tony Hayward’s tenure,” McGregor says. “His ability to run BP going forward has been seriously compromised by this.
Analyst Richard DeKaser of Woodley Park Research doesn’t see BP oil stock dropping any further. “It seems to me like all the bad news is out now. The total share price drop has been 36 percent, or about $58 billion. Analysts are putting the top-end estimate for damages related to the spill at $35-$40 billion.”
BP stock continues to slide in the markets. But analysts say even amidst uncertainty of the company’s future, the real damage lay ahead, as the company may struggle to win further drilling permits in the U.S., where it currently derives 25 percent of its energy. Hayward’s view has not helped BP’s U.S. endeavors; the CEO has described the oil leak as “very, very modest,” and that “no one wants this thing over more than I do. I’d like my life back.”
DeKaser says BP can learn some lessons from how Exxon Valdez handled their oil spill by including criminal charges in their costs. He also says CEO Hayward can do a better job of describing the outcome of the situation. “He’s consistently been on the mild side of reality, and that only creates a greater political backlash.”
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.