Rumors were rampant this morning that Exxon Mobil was interested in acquiring BP (NYSE:BP), pushing the stock up in early trading, where in London it rose as high as 451.35 pence, and up to $43.98 in New York before pulling back.
At 11:45 AM EDT, BP was trading at $43.75, down $0.16, or 0.38.
BP had no comment on the speculation, and Exxon communicated the usual idea that it was "not our practice to comment on market speculation, rumors or media reports."
Even if a company was interested in BP, it seems they would wait until the decision on whether or not they would be considered grossly negligent in the Gulf oil spill, which could cost them billions more than they're looking at at this time.
Showing posts with label Gross Negligence. Show all posts
Showing posts with label Gross Negligence. Show all posts
Friday, November 5, 2010
Wednesday, November 3, 2010
BP's (NYSE:BP) Dudley Working on Balancing Defense and Offense
Now that BP (NYSE:BP) has finally entered into a stage where crisis management isn't the word used to describe their purpose, CEO Bob Dudley is seen to be working on bringing balance back to the company, as he retains the defensive posture related to the Gulf, while looking for some offense in relationship to growth.
Some of the final steps that need to be taken are to sell enough assets to pay for the estimated $40 billion the company will pay out through the years.
They've committed to raising about $30 billion through asset sales, and so far have sold off close to $14 billion.
Two assets they haven't made a decision on yet include Prudhoe Bay in Alaska, and its Pan American Energy LLC asset in Argentina. Pan American would bring them as much as $9 billion if they choose to go that route.
Part of BP's problem on the defensive side is awaiting the decision on whether or not they'll be designated as being grossly negligent concerning the oil spill in relationship to the Clean Water Act.
How that is determined could result in a liability differential of up to $10 billion.
It seems they're operating under the assumption they won't be paying the high end of the fine, but still need to raise an additional $16 billion or so to prepare for the financial challenges still remaining.
The problem for BP as a company is it keeps them in a defensive posture until they take care of it, so may take care of it sooner rather than later.
They have time as far as the payouts are concerned, but it's more the psychological factor for workers and the leaders of the company, who need to proceed in a way that shows they're going forward, while being sure they don't end up with any new fiasco.
Neglect of either one will hurt BP, and Dudley, from his comments and decisions, shows he understands that and is working hard to bring that about.
Some of the final steps that need to be taken are to sell enough assets to pay for the estimated $40 billion the company will pay out through the years.
They've committed to raising about $30 billion through asset sales, and so far have sold off close to $14 billion.
Two assets they haven't made a decision on yet include Prudhoe Bay in Alaska, and its Pan American Energy LLC asset in Argentina. Pan American would bring them as much as $9 billion if they choose to go that route.
Part of BP's problem on the defensive side is awaiting the decision on whether or not they'll be designated as being grossly negligent concerning the oil spill in relationship to the Clean Water Act.
How that is determined could result in a liability differential of up to $10 billion.
It seems they're operating under the assumption they won't be paying the high end of the fine, but still need to raise an additional $16 billion or so to prepare for the financial challenges still remaining.
The problem for BP as a company is it keeps them in a defensive posture until they take care of it, so may take care of it sooner rather than later.
They have time as far as the payouts are concerned, but it's more the psychological factor for workers and the leaders of the company, who need to proceed in a way that shows they're going forward, while being sure they don't end up with any new fiasco.
Neglect of either one will hurt BP, and Dudley, from his comments and decisions, shows he understands that and is working hard to bring that about.
Tuesday, November 2, 2010
BP (NYSE:BP) Results Lag Exxon (NYSE:XOM), Marathon (NYSE:MRO), Chevron (NYSE:CVX)
While higher oil prices helped major oil companies like Exxon (NYSE:XOM), Marathon (NYSE:MRO), Chevron (NYSE:CVX) to solid quarters, although Chevron was weaker than expected, it wasn't able to help BP (NYSE:BP) overcome continuing charges related to expenses incurred from the Gulf of Mexico oil spill.
Still, it was good news for BP in that they generated a profit for the quarter soon after permanently plugging the Macondo oil well.
After taking another charge of $7.7 billion, it brings the total estimated costs of the BP oil spill to almost $40 billion, already exceeding expectations, and will surely rise more going forward.
A significant amount of the financial health of BP will relate to whether or not they're designated as being grossly negligent, which could cost them billions more if they are.
CEO Bob Dudley says he's confident that isn't going to happen.
Earnings per share for the latest quarter reached $0.59, a major improvement over the $5.42 they lost in the second quarter, but obviously falling short of the $1.60 generated last year in the same quarter before the spill.
Still, it was good news for BP in that they generated a profit for the quarter soon after permanently plugging the Macondo oil well.
After taking another charge of $7.7 billion, it brings the total estimated costs of the BP oil spill to almost $40 billion, already exceeding expectations, and will surely rise more going forward.
A significant amount of the financial health of BP will relate to whether or not they're designated as being grossly negligent, which could cost them billions more if they are.
CEO Bob Dudley says he's confident that isn't going to happen.
Earnings per share for the latest quarter reached $0.59, a major improvement over the $5.42 they lost in the second quarter, but obviously falling short of the $1.60 generated last year in the same quarter before the spill.
Monday, October 25, 2010
BP (NYSE:BP) Needs These 5 Things to Happen to Resume Growth
Although there have been some foreign deals forged and implemented by BP (NYSE:BP), which is good news for them and their shareholders, they're still, for the most part, in a holding mold until four major things are handled and resolved.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Only one of the four things needed to be done are under the direct control of BP, and that is the divesting of parts of the company to raise capital to pay for liabilities associated with the Gulf of Mexico oil spill.
The other three things that need to happen are the completed examination of the blowout preventer, determination of whether or not they are found in gross negligence over the accident, and how much, if any, shared liability with partners they'll participate in.
The last thing, which will be mostly determined by the four mentioned above, is the reinstatement of the dividend by BP.
As far as the blowout preventer, that will probably take longer than the rest, and is just starting the process of examination. It's important in whether or not Cameron International, which developed it, will be liable for part of the costs of the spill.
In the largest liability remaining to be determined, BP is awaiting the decision on whether or not they're going to be designated as being grossly negligent in the ordeal. If they are, it could cost them over $17 billion more in fines, above and beyond all existing and future payouts.
That also is connected to the next element, which is shared liability. If they aren't found grossly negligent, their partners in the Macondo well: Anadarko (NYSE:APC) and MOEX, via their majority owned Mitsui (Nasdaq:MITSY), would have to pay out some significant capital for their part in the failure.
Selling of their assets, as mentioned, is under the control of BP, and that will give shareholders and potential investors more confidence in the company, which would ultimately be crowned with the reinstatement of their dividend, which mounting pressure is being asserted on the company to do.
If and when all these happened and/or are concluded, we'll see a much clearer picture of the future of BP, which remains tenuous at best.
Depending on the outcomes of the mentioned events that need to happen, will determine whether BP will be split up or taken over by a larger competitor, or continue on as a leaner but competitive energy firm.
Friday, October 1, 2010
BP's (NYSE:BP) Dudley Doesn't See "Gross Negligence" Over Oil Spill
Newly crowned BP (NYSE:BP) chief executive officer Bob Dudley said he doesn't believe the US Justice Department will end up accusing the company of being grossly negligent in the Gulf of Mexico oil spill.
That decision will be among the largest factors in financial liability relating to the spill.
If they were to be found in gross negligence, it would cost them billions of dollars more, not only in direct fines, but in civil liabilities as well.
It would probably end up with criminal charges against those responsible if that was the ruling.
Dudley said to the Houston Chronicle, "We don't believe we have been grossly negligent in anything we've seen in any of the investigations."
Tony Hayward stepped down yesterday as BP CEO and is a board member of the joint venture TNK-BP.
That decision will be among the largest factors in financial liability relating to the spill.
If they were to be found in gross negligence, it would cost them billions of dollars more, not only in direct fines, but in civil liabilities as well.
It would probably end up with criminal charges against those responsible if that was the ruling.
Dudley said to the Houston Chronicle, "We don't believe we have been grossly negligent in anything we've seen in any of the investigations."
Tony Hayward stepped down yesterday as BP CEO and is a board member of the joint venture TNK-BP.
Wednesday, September 29, 2010
BP (NYSE:BP) Negotiating with Feds Over Oil Fines
BP (NYSE:BP) has entered into negotiations with the Obama administration over coming to some type of settlement over fines related to the Gulf of Mexico oil spill.
According to Rep. Steve Scalise, R-La., his staff got wind of the discussions when working on legislation related to the oil spill which would keep money from fines paid out by BP in the Gulf region.
Unsurprisingly, the real battle is over whether or not BP will be labeled as being grossly negligent in relationship to the spill.
The problem with that is no study, other than the one conducted by BP, has been conducted to find out the absolute reason behind the accident.
So how could the government be battling over something that there is no conclusion made yet? The only reason BP is in their sights is no company related to the spill has the capital to pay the fines other than them. Of course they also had the largest stake in the well, but that has nothing to do with culpability.
It may surprise people, but BP is in the driver's seat in regard to this issue. If the government doesn't come to an agreement with them, all BP has to do is litigate, and that would take years, essentially holding up any fines being paid out until then, and with no guarantee the government would win the case (in reference to BP being considered grossly negligent).
Just under the Clean Water Act, BP could pay out up to $21 billion. It's doubtful it will ever come to that, as that wouldn't include other fines and the money they'll have to pay out from the hundreds of lawsuits.
Even with the size of BP, they just aren't big enough to pay that kind of money out, which doesn't include the $20 billion escrow fund which has the claims part of the fund administered by Kenneth Feinberg.
There should be a settlement of some sort, but it will depend on how far the Department of Justice wants to take it. If they ask for too much, it may leave BP few options.
Again, the problem is there are no conclusions yet made as to the cause of the disaster, and until that is investigated and discovered, it's hard to see the government has to stand on; at least concerning the decision on whether or not BP was grossly negligent, which is the crux of this particular part of the fine process.
According to Rep. Steve Scalise, R-La., his staff got wind of the discussions when working on legislation related to the oil spill which would keep money from fines paid out by BP in the Gulf region.
Unsurprisingly, the real battle is over whether or not BP will be labeled as being grossly negligent in relationship to the spill.
The problem with that is no study, other than the one conducted by BP, has been conducted to find out the absolute reason behind the accident.
So how could the government be battling over something that there is no conclusion made yet? The only reason BP is in their sights is no company related to the spill has the capital to pay the fines other than them. Of course they also had the largest stake in the well, but that has nothing to do with culpability.
It may surprise people, but BP is in the driver's seat in regard to this issue. If the government doesn't come to an agreement with them, all BP has to do is litigate, and that would take years, essentially holding up any fines being paid out until then, and with no guarantee the government would win the case (in reference to BP being considered grossly negligent).
Just under the Clean Water Act, BP could pay out up to $21 billion. It's doubtful it will ever come to that, as that wouldn't include other fines and the money they'll have to pay out from the hundreds of lawsuits.
Even with the size of BP, they just aren't big enough to pay that kind of money out, which doesn't include the $20 billion escrow fund which has the claims part of the fund administered by Kenneth Feinberg.
There should be a settlement of some sort, but it will depend on how far the Department of Justice wants to take it. If they ask for too much, it may leave BP few options.
Again, the problem is there are no conclusions yet made as to the cause of the disaster, and until that is investigated and discovered, it's hard to see the government has to stand on; at least concerning the decision on whether or not BP was grossly negligent, which is the crux of this particular part of the fine process.
Tuesday, September 14, 2010
BP (NYSE:BP) to be Sued by Justice Department
In a court filing on Monday, the Justice Department said they will probably sue BP (NYSE:BP) for damages related to the Gulf of Mexico oil spill from the Deepwater Horizon.
The filing was with the U.S. District Court in New Orleans, Louisiana.
If they proceed, claims against BP would be based on the Clean Water Act and the Oil Pollution Act,
The Oil Pollution Act was put in place after the oil spill from the Exxon-Valdez (NYSE:XOM).
It wasn't clear if they're going to wait to see if BP will be tagged with a "gross negligence" label, which would significantly increase the potential penalties.
The filing was with the U.S. District Court in New Orleans, Louisiana.
If they proceed, claims against BP would be based on the Clean Water Act and the Oil Pollution Act,
The Oil Pollution Act was put in place after the oil spill from the Exxon-Valdez (NYSE:XOM).
It wasn't clear if they're going to wait to see if BP will be tagged with a "gross negligence" label, which would significantly increase the potential penalties.
Thursday, September 9, 2010
Citigroup (NYSE:C) Responds to BP (NYSE:BP) Report
A flurry of responses, negative and positive, emerged in the aftermath of the release by BP (NYSE:BP) of their report stating the causes which led to the destruction of the Deepwater Horizon oil rig, and resultant release of oil and gas into the Gulf of Mexico.
Citigroup (NYSE:C) liked what BP had to say: “The report is not enough to give visibility on the eventual cost of this episode to BP but it demonstrates that BP is vigorously contesting that they were guilty of gross negligence, which would lower the range of cost outcomes.”
It seemed the market in general liked the report, and BP and other major oil companies rose after the contents of the report were released.
The report basically said a series of failures led to the accident, including systemic, mechanical and human failure.
Citigroup (NYSE:C) liked what BP had to say: “The report is not enough to give visibility on the eventual cost of this episode to BP but it demonstrates that BP is vigorously contesting that they were guilty of gross negligence, which would lower the range of cost outcomes.”
It seemed the market in general liked the report, and BP and other major oil companies rose after the contents of the report were released.
The report basically said a series of failures led to the accident, including systemic, mechanical and human failure.
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