Well its 2011, and now we’ll have to talk about the Deepwater Horizon disaster as last year’s oil spill. Unfortunately, we can’t make a New Year’s resolution to shed the far-reaching and lingering impacts in the Gulf of Mexico. We can, however, resolve to keep the story alive and hopefully learn from these mistakes and injustices.
With the Christmas holidays and sluggish interim until New Year’s, it has been a pretty slow news week. Unsurprisingly, the AP’s annual poll of news editors voted the Gulf oil spill the top news story of 2010–it was kind of hard to ignore from April until September.
I’m sure many people are secretly (or publically) wishing for the demise of BP p.l.c, but months later the Gulf spill now seems like a chip on the shoulder of an otherwise sturdy company. The AP reports:
Cleanup, government fines, lawsuits, legal fees and damage claims will likely exceed the $40 billion that BP has publicly estimated, according to an Associated Press analysis. But they’ll be far below the highest estimates made over the summer by legal experts and prominent Wall Street banks, such as Goldman Sachs, which said costs could near $200 billion
BP will survive the worst oil spill in U.S. history for several key reasons: it has little debt; its global businesses are forecast to generate $26 billion next year in cash flow from operations; the environmental impact of the spill isn’t as bad as feared; and the government seems unlikely to ban BP from Gulf drilling. To bolster its finances, BP has cut its dividend, issued debt and sold more than $21 billion in assets.
…The AP analysis shows the company is likely to face $38 billion to $60 billion in spill-related costs. A settlement with the federal government could reduce that amount, while a successful class-action lawsuit could add billions more.
Stock prices are inching their way back up–pre-spill share prices on April 20 were $60.48, dipping to a low of $27.07 on June 25, and now back up to $44.11 as of this week. If I wasn’t morally opposed to it, that would have made a damn good investment (although one of BP’s cost-saving measures was to suspend shareholder dividends this year, so maybe not).
Exxon never lost its perch among industry leaders, and BP won’t either, says Citigroup’s [Mark] Fletcher. BP remains among the top oil drillers in a world that runs on petroleum, and that may be the best way to judge the company’s lasting power. “Did (Valdez) stop anyone from buying Exxon gasoline? No. Exxon’s results are better than anyone’s on a multiyear basis,” Fletcher said.
Meanwhile, theres’s STILL oil on 168 miles of Louisiana coast:
Someone please hurry up and churn out those electric cars.