BP continues to hit the headlines for all the wrong reasons. This week the shares hit their lowest level since early 1997 amid ongoing uncertainty about the final cost of the oil spill, which is still growing. Last week BP put aside $20bn into a fund to cover the cost of the damage, but this does not include the hitherto unquantifiable cost of fines and penalties. BP suspended its dividend for three quarters and looked set to sell assets to bolster its cash reserves. A series of PR gaffes haven't helped either.
What the commentators said
BP's public relations response has been "catastrophically mishandled", said Jeremy Warner in The Daily Telegraph. It has "unforgivably lagged events and the public mood". CEO Tony Hayward's appearance before Congress last week was "lamentablyevasive". Chairman Carl-Henric Svangberg apologised to "the small people" hurt by the spill, and then he had to apologise for being patronising.
Hayward's yachting around the Isle of Wight also appeared calculated to "annoy and offend", added Tracy Corrigan on Telegraph.co.uk. This "dead man sailing" looks as though he won't even last until the spill is brought under control. As for the final bill, Professor Lynn Lopucki of UCLA Law School thinks there's "no top limitthere are definitely scenarios that end in the bankruptcy
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That seems overblown, according to The Economist. Going bust would require either another catastrophe in the Gulf or "an unlimited and unprecedented broadening of government fines and private litigation". Nor is a bust BP in the government's interest. But the firm will suffer "a lasting blow" to its global reputation and finances. The ultimate bill won't be clear for a long time.
BP: 338p; 12m change -30%
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