BP plc (ADR)(NYSE:BP) trying to overcome oil spill scandal with new projects


Dallas, Texas 07/05/2013 (Financialstrend) – BP plc (ADR)(NYSE:BP) still remains under the shadow of the oil spill scandal that took place three years ago at the Gulf of Mexico. Litigations are pending and despite the company’s claim of settling most of the cases, more of them are still to come. This uncertainty is also reflected in the stock price, which ranged between $40 and $45 this year, closing at $41.18 on Tuesday. The share price contracts for the last 5 years, a fact that has given birth to speculation among analysts on what the next big trigger for the company could be. Most analysts do not expect the US court to declare a verdict that could break up the company but any ruling that helps to assess the degree of damage to a certain level could be the trigger the market is patiently waiting for.

One of the largest two projects of BP has been the development of oilfields in Brazil’s Santos basin, with the partnership of the state-owned Petrobas.However, BPrevealed the challenges it expects before the project could be deemed successful. The other large project of BP is in Australia, where it is developing a liquefied natural gas operation. For this purpose, the company has contractedDiamond Offshore Drilling Inc (NYSE:DO)to build an ultra deep water rig to be used off the Australian coast. Iraq is another country where BP is developing one of the largest oilfields in Rumaila. 150 new wells are expected to bedrilled by the end of this year.

The most remarkable move of BP is the sale of its 50% stake in TNK-BP to the Russian state-owned oil giant Rosneft. The company got $16.65 billion in cash and a 20% stake in Rosneft, expecting to explore Russia’s huge shale oil reserves besides increasing oil production with its advanced technology.