If BP Plc’s (BP: 40.23 ,-0.29 ,-0.72%) $20 billion escrow account runs out, and the oil giant quickly burns through the $10 billion dollars in savings from its recently suspended dividend, the beleaguered company still has plenty of assets to sell before bankruptcy becomes a realistic option.
When BP is described by analysts as a vast global conglomerate whose tentacles reach into just about every facet of the world’s energy markets, they’re not kidding.
There’s Air BP, one of the largest global suppliers of aviation fuels. There’s BP France, which operates one of that country’s largest networks of gas stations. Castrol India Ltd., meanwhile, generates much of the oil and lubricants that keep engines running smoothly in that rapidly developing nation. And don’t forget BP’s ARCO Aluminum unit, which makes aluminum sheets used to manufacture soda cans and cars.
With liabilities and cleanup costs mounting in the wake of what is now widely regarded as the worst environmental disaster in U.S. history, BP is going to have to raise money – lots of it, and fairly quickly.
Consider that last week Raymond James analyst Pavel Molchanov raised his estimate for BP’s total gulf-related costs to an astonishing $63 billion. While that figure has been questioned by other industry experts, the fact remains that the price tag continues to escalate and no one knows for certain what the future holds for BP...
Also beneficial to the company would be an easing of rhetoric on the part of the Obama administration, according to Olson. Criticism of the company by the president and his aides has led to a “media firestorm” that has made a bad situation worse for BP.
If Obama expects BP to fulfill its promise of cleaning up the gulf, he should tone down that criticism, Olson said. “The last thing the Obama administration wants is for this company to go out of business,” he said.
Reporter: "Entire communities where they're vomiting blood" -- "Massive, massive disa
Reply With Quote
Bookmarks