• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 12 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 4 hours Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 4 hours Theresa May to Step Down
  • 5 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 15 hours Total nonsense in climate debate
  • 15 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 15 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 18 hours Will Canada drop Liberals, vote in Conservatives?
  • 19 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 19 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 15 hours Apple Boycott in China
  • 11 hours Australian Voters Reject 'Climate Change' Politicians
  • 2 hours Why is Strait of Hormuz the World's Most Important Oil Artery
Jen Alic

Jen Alic

 

More Info

Trending Discussions

Bad Times for BP Amid Rumors of Acquisition or Split

Times are bad for British Petroleum (BP). This week it was temporarily banned from new US federal contracts as punishment for the 2010 Gulf of Mexico oil spill, and some analysts think the company is now ripe for takeover, while others think a split is more likely.

Regardless, we should see more BP assets up for sale.

Citing BP’s “lack of business integrity” during the April 2010 spill disaster, the Environmental Protection Agency (EPA) on Wednesday banned BP from new federal contracts for an undefined period.

Two weeks ago, BP reached a $4.5 billion settlement with the Justice Department over criminal charges related to the 200-gallon oil spill and the death of 11 men.

On Thursday, three BP figures—two well-site managers and one former executive—pleaded not guilty to criminal charges related to the spill. The two site managers were charged on 15 November with involuntary manslaughter and Clean Water Act Violations.

Can BP recover from the settlement and survive the ban on new contracts? While it can recover from the settlement, surviving the ban will depend on how long it lasts—and for now that is anyone’s guess. It just missed out on a contract for 20 million offshore acres in the western Gulf. It can’t afford too many more of these misses.

When the EPA decides to lift the ban will depend on when BP can demonstrate that it is meeting federal standards. How it would do this remains unclear. Apparently one step towards this has already been taken in the form of a 100-page paper ostensibly demonstrating the company’s commitment to responsibility.

Related Article: BP's Billion Dollar Settlement: Here's Where the Money Will Go

And the settlement and ban on new contracts are not the end-all in the BP drama. In February 2013, the company will be taken to court over a federal civil lawsuit related to violations of the Clean Water Act. BP might see another fine of billions of dollars here.

So far, BP has unloaded some $50 billion in assets to pay for the oil spill.

Last month, the company relieved itself of an uncomfortable joint venture with Russian oligarchs. In return, BP accepted a 20% stake in Russian state-owned OAO Rosneft oil company (ROSN) and another $12.3 billion in cash.

This week, Abu Dhabi National Energy Company PJSC (TAQA) agreed to acquire over $1 billion in BP oil and gas assets in the UK North Sea.

Now that BP’s shares have fallen to their lowest point since July, is the company ripe for takeover?

Some analysts point out that because BP is the cheapest major non-state oil company in the world, its troubles make it a prime target for takeover.

Others disagree, saying BP is more likely to be split into parts than to be acquired. They say BP is too big to be merged, and even companies like ExxonMobil (XOM)—whom analysts have speculated might be interested in acquiring BP—are not likely to bite. Here, analysts note that such an acquisition does not fit with ExxonMobil’s current strategy, which is to acquire unconventional assets.

By. Jen Alic of Oilprice.com




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment
  • Mel Tisdale on December 04 2012 said:
    All BP needs to do is distance itself from the City of London and its corrupt ways. If they did, they would soon be back in favour - as long as they also steered clear of Wall St, of course.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News