Monday, May 3, 2010

BP (NYSE:BP) Chevron (NYSE:CVX) Shell (NYSE:RDS.A) Have Most Exposure in Gulf

BP (NYSE:BP) Chevron (NYSE:CVX) and Shell (NYSE:RDS.A) have the most exposure in the Gulf of Mexico when considering the impact of the explosion of the Deepwater Horizon oil rig and the fallout from it and how it will effect the financials in the future.

According to Deutsche Bank analyst Paul Sankey, the exposure of BP is the most at $37 billion, with Shell and Chevron behind them.

Costs will inevitably rise as a consequence of the disaster in that particular region, and while all companies will ultimately bear the brunt of those costs, these three oil companies will share the most.

Some of the expected cost increases could be increased royalties and/or taxes and more costly safety requirements.

BP will be the most effected, and it will cost them more to drill the area in the future while probably receiving less return on the oil.

1 comment:

Unknown said...

Wouldn't the players in this market (BP, Chevron, & Shell) have the easiest time implementing any changes that might come as they're already there in the Gulf of Mexico? Any proposed changes just increases the complexity to entry into this market.