BP Plc. (BP) said that the cost of response to the disastrous oil spill in the Gulf of Mexico (GoM) to date is approximately $990 million including the cost of the containment, relief well drilling, grants to the Gulf states, claims paid and federal costs.
Yesterday, BP announced the construction of six sections of Louisiana barrier islands approved by the U.S. government. To fund this construction, the company has established a $360 million escrow account.
To cope with the disaster, BP may divest some of its premium assets including a stake in the largest U.S. oil field, according to Bloomberg.com. The website reported that BP may sell its 26% stake in Prudhoe Bay on Alaska’s North Slope. Potential bidders include China National Petroleum Corp., Occidental Petroleum Corp. (OXY) and Hess Corp. (HES).
Since the GoM disaster on Apr 21, 2010, BP has lost 31% of its market value. Apart from this, the largest oil and natural gas producer in the U.S. Gulf of Mexico is facing criminal and regulatory probes into the cause of the spill.
The chief executive officer of BP will hold a call with investors today to address the concerns associated with dividend payment and the tumbling share price.
While the GoM oil spill negatively impact the company’s role as the world’s largest offshore operator, we maintain our Neutral recommendation on the belief that the company may persist with its dividend and capex plans for this year.
Read the full analyst report on “BP”
Read the full analyst report on “OXY”
Read the full analyst report on “HES”
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