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Kai Ryssdal: This morning BP announced it lost almost $5 billion last year. That’s quite a tumble from the $22 billion profit that BP made in 2009. The price, if you will, of the oil leak in the Gulf of Mexico.
But today CEO Robert Dudley announced BP is going to expand its drilling, it’s going to pay a stock dividend and it’ll probably turn a nice profit in 2011. So in the aftermath of the mess in the Gulf of Mexico, is BP’s rebound for real?
From the Marketplace Sustainability desk, Eve Troeh reports.
Eve Troeh: BP CEO Bob Dudley announced the company’s first annual loss in 20 years. But he described the Gulf oil spill as last year’s problem.
Bob Dudley: We went through things that no company ever wants to go through. We’ve internalized them.
Energy economist Gilbert Metcalf says, yes, BP suffered. And, yes, it’s mostly recovered.
Gilbert Metcalf: They’re like the python that digested the large goat. The goat’s through the system, and now they’re back in business.
That “goat” would be the $40 billion or so BP is setting aside to pay for the oil spill. He says rising oil and gas prices have helped the company save that money more quickly. BP also sold more than $20 billion in assets such as drilling rights and leases. It announced today it’s selling two major U.S. refineries.
Metcalf says BP knows a smaller footprint looks good to investors, as well as regulators.
Metcalf: Solvent companies tend to be safer companies.
No one knows how much BP will have to pay in the end for lawsuits and government fines. The company acknowledges that. But Environmental Defense Fund analyst Elgie Holstein says BP won’t be able to claim it’s broke when the time does come.
Elgie Holstein: Everyone now knows that they’re in a financial position to pay what they clearly do owe for the environmental and economic impact that they caused.
Holstein says under the Clean Water Act alone, BP could owe $4,000 per barrel of oil spilled. It’s contesting government claims over how many millions of barrels wound up in the Gulf.
I’m Eve Troeh for Marketplace.
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