There are a number of things that need to be resolved before BP's (NYSE:BP) shares will be able to be released from the current constraints on them, not the least of which is the ongoing investigation by the U.S. Justice Department.
An investigation by U.S. Attorney General Eric Holder will determine whether or not BP will be designated as being grossly negligent under the Clean Water Act. If they are, their costs would be up to $17.6 billion.
They would actually be much higher though, as their partners in the failed Macondo well, Anadarko (NYSE:APC) and Mitsui (NASDAQ:MITSY), would be exempt from paying for their part in the mishap because of the terms of the partnership if BP is considered to be grossly negligent in the matter. That could be worth several billion more at minimum to them.
Other potential consequences could be the forfeiture well operating licenses and not being allowed to bid on future government contracts.
Until this is brought to a conclusion, BP shares will continue to underperform.
At this time BP is the largest operator in the Gulf of Mexico.
1 comment:
You have your math wrong. $17B is the MOST they will pay. If they are NOT found gross negilegent, then the other partners will have to partake in their share of paying that $17B.
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