A lot of people are asking "what's going to happen to BP after this mess?". The answer depends on how quickly the oil flow can be stopped and how good BP's PR firm (the Brunswick Group) can spin the company's questionable attempts at stopping the flow. Though BP isn't the only company writing checks, estimates for the spill's cost run anywhere from $5B all the way up to $37B. These estimates depend on how well BP's current "containment" cap actually works. If you add those numbers to the near 50% drop in stock and news that the US government is launching a criminal investigation to determine if any illegal behavior took place before or after the explosion, you get the recipe for a very expensive year for BP. After the dust has settled what will happen to the company? Will it be parceled out to competitors? Will it continue being a major oil industry player? Well, we can look to the past for a reference. In June '79 the Ixtoc I, a deep water oil well off the coast of Mexico, suffered a similar blowout, leaking an average of 20,000 barrels/day into the ocean for a period of 10 months... That's right, 10 months. Petroleos Mexicanos, the owner of the well ended up spending $100M in cleanup costs but fully avoided paying compensation for damages by asserting sovereign immunity, a case that BP unfortunately won't be able to plea. Pemex (Petroleos Mexicanos) is currently the 10th largest oil co. in the world.
-Nicho
the writing on the wall is clear wait till the criminal investigation ensues and then when the stock is at its lost pick up a few shares I don't think Bp is out of the oil game just yet i mean come on its black gold baby
ReplyDeleteand as for the blog nicholas how bout we try getting deep instead of posting "smut" that is in the end irrelevant love u buddy talk to you soon.
Thanks for the comment Jordan. The purpose of this blog is to publish short, subjective comments on current news. "Deep" isn't the aim. How do I get access to your stuff?
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