I have created this thread as a distinct place to discuss the merits (or otherwise) of the investment case for BP, in the light of the oil spill, so that the Transocean semi fire thread can be kept "purer" for discussion of technical matters relating to the accident.
This thread can be used for reporting news and discussion relating to BP (LON:BP.) as an investment.
My own basis for investing in BP during the crisis is that I did not feel it likely that the dividend would be severely impacted. Not for the first time, some analysts are suggesting that the dividend COULD be under threat today. Clearly there is a risk but the numbers do not currenty suggest to me that it is excessively high. A reasonably conservative view is that the total cost of this crisis: well repair, spill clean up, compensation, penalties etc could be in the $20-$30bn range - spread over, maybe, 5 years. That is the sort of figure that BP could absorb without a huge financial impact, given its cashflow.
Of course, there is a risk/probability that BP's US operations & revenue generation in the future could also be impacted... but if so, this could impact the earnings of other operators who also will have to bear higher regulatory/insurance costs. The end result could easily be a higher oil price which would counterbalance the cost impact.
The author may hold shares in this company, all opinions are his own and you should check any statements that appear factual and not rely on them before making an investment decision. The author is NOT a qualified analyst nor authorised to give investment advice. Whilst the author is a director of ShareSoc, all views expressed are entirely his own and not necessarily those of ShareSoc.