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08 September 2010
BP shares traded higher by more than 3% on Wednesday as the release of an internal investigation into the US Gulf oil spill offered closure to the crisis and shed light into how BP could defend itself in future litigation.
Fitch Ratings upgraded its credit ratings for BP, reflecting the capping of the blown-out Macondo well, improving liquidity and a clearer picture of pending liabilities, it said.
Fitch said BP’s total liabilities would be $35.0bn (€27.7bn) to $67.5bn, depending on the company’s success in possible lawsuits.
Even at the high end of that range - which would include a finding of gross negligence, larger fines under the US Clean Water Act, and no write-off tax relief - Fitch said BP “now has adequate financial resources” to meet its obligations, in part due to $30bn in planned asset sales.
Fitch reversed its 15 June downgrade on the company, which came at the height of the oil spill crisis.
In its investigation, BP cited a “shared responsibility” involving multiple parties, including it,
Halliburton and Transocean. Those companies were responsible for “a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces”, BP said.
BP added that it was “determined to learn the lessons for the future” and said its investigation team had proposed a total of 25 recommendations.
Rig owner Transocean, however, called the report a “self-serving” attempt to conceal “BP’s fatally flawed well design”.
Likewise, oil services major Halliburton said BP’s report contained “a number of substantial omissions and inaccuracies”, noting that the work it performed on the Macondo well was in accordance with BP specifications.
The US Department of Justice (DOJ) is undertaking a criminal investigation into the leak, while the Chemical Safety and Hazard Investigation Board (CSB) is conducting its own inquiry.
The 20 April explosion of the Deepwater Horizon offshore rig killed 11 workers and led to the largest oil spill in Gulf history. The price tag for the spill is already in excess of $8bn, according to BP.
That figure includes all costs involved in fighting the oil spill, relief-well drilling and claims already paid, BP said.
No oil has leaked since the 15 July closure of a sealing cap over the well, and the company cemented it in early August.
Over the past weekend, the Macondo well’s failed blowout preventer (BOP) was removed, allowing investigators to examine it.
US National Incident Commander Thad Allen said on Wednesday that BP officials were still conducting diagnostic tests on the well and learning more about it before attempting a final kill of the well in the coming days.
BP’s stock closed higher by $1.18/share, or 3.2%, at $38.37/share on Wednesday at the New York Stock Exchange (NYSE). BP trades on the NYSE through American depositary receipts (ADR).
The company’s stock is up 33% from the 14-year low it hit in late June, at the peak of the Gulf spill crisis.
Source: www.icis.com
BP shares traded higher by more than 3% on Wednesday as the release of an internal investigation into the US Gulf oil spill offered closure to the crisis and shed light into how BP could defend itself in future litigation.
Fitch Ratings upgraded its credit ratings for BP, reflecting the capping of the blown-out Macondo well, improving liquidity and a clearer picture of pending liabilities, it said.
Fitch said BP’s total liabilities would be $35.0bn (€27.7bn) to $67.5bn, depending on the company’s success in possible lawsuits.
Even at the high end of that range - which would include a finding of gross negligence, larger fines under the US Clean Water Act, and no write-off tax relief - Fitch said BP “now has adequate financial resources” to meet its obligations, in part due to $30bn in planned asset sales.
Fitch reversed its 15 June downgrade on the company, which came at the height of the oil spill crisis.
In its investigation, BP cited a “shared responsibility” involving multiple parties, including it,
Halliburton and Transocean. Those companies were responsible for “a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces”, BP said.
BP added that it was “determined to learn the lessons for the future” and said its investigation team had proposed a total of 25 recommendations.
Rig owner Transocean, however, called the report a “self-serving” attempt to conceal “BP’s fatally flawed well design”.
Likewise, oil services major Halliburton said BP’s report contained “a number of substantial omissions and inaccuracies”, noting that the work it performed on the Macondo well was in accordance with BP specifications.
The US Department of Justice (DOJ) is undertaking a criminal investigation into the leak, while the Chemical Safety and Hazard Investigation Board (CSB) is conducting its own inquiry.
The 20 April explosion of the Deepwater Horizon offshore rig killed 11 workers and led to the largest oil spill in Gulf history. The price tag for the spill is already in excess of $8bn, according to BP.
That figure includes all costs involved in fighting the oil spill, relief-well drilling and claims already paid, BP said.
No oil has leaked since the 15 July closure of a sealing cap over the well, and the company cemented it in early August.
Over the past weekend, the Macondo well’s failed blowout preventer (BOP) was removed, allowing investigators to examine it.
US National Incident Commander Thad Allen said on Wednesday that BP officials were still conducting diagnostic tests on the well and learning more about it before attempting a final kill of the well in the coming days.
BP’s stock closed higher by $1.18/share, or 3.2%, at $38.37/share on Wednesday at the New York Stock Exchange (NYSE). BP trades on the NYSE through American depositary receipts (ADR).
The company’s stock is up 33% from the 14-year low it hit in late June, at the peak of the Gulf spill crisis.
Source: www.icis.com
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