Open

Coming up

Don't miss

Replay


LATEST SHOWS

FRANCE IN FOCUS

France: 2014 in review

Read more

#THE 51%

South Africa: Taking a stand against child marriage

Read more

DEBATE

The Future of the Book

Read more

DEBATE

The Future of the Book (part 2)

Read more

REPORTERS

France 24’s best documentaries of 2014

Read more

THE INTERVIEW

'We have to build a new Tunisia', says the president of the Tunisian Parliament

Read more

FACE-OFF

France on alert after attacks: a case of collective hysteria?

Read more

THE INTERVIEW

'Beijing needs to revaluate its policy in the Tibetan areas', says FM of the Tibetan government-in-exile

Read more

INSIDE THE AMERICAS

Uruguay: freed Guantanamo detainees try to adjust to normal life

Read more

Business

BP shares plummet as US threatens new penalties

Text by News Wires

Latest update : 2010-06-10

BP shares hit a 13-year low in early trading Thursday amid fears the British company will face huge penalties in the US over the Gulf of Mexico oil spill.

REUTERS - Shares in oil giant BP continued to fall heavily on Thursday, hitting their lowest level since 1997, even as the company said it saw no justification for such a move.

The shares opened trading in London 11 percent lower before recovering to trade down 7.3 percent at 363 pence at 0726 GMT, against a 2.3 percent drop in the STOXX Europe 600 Oil and Gas index.

From 'Top hat' to 'Top kill' and back

The drop follows days of heavy losses and catches up with a drop of over 15 percent in the price of BP’s U.S.-traded American Depositary Receipts (ADRs) on Wednesday.

Much of the U.S. fall came after the UK market had closed after U.S. Interior Secretary Ken Salazar said BP would be told to pay workers laid off due to a drilling moratorium announced in the wake of the oil spill in the Gulf of Mexico.

The comment revealed a new liability, which could amount to many millions of dollars, and signaled a ratcheting up of political pressure on BP, spooking investors.

However, BP said it had the resources to deal with its liabilities.

“BP faces this situation as a strong company,” the company said in a statement on Thursday.

“The company is not aware of any reason which justifies this share price movement,” it said of the ADR drop.

ING analyst Jason Kenney said the stock was “materially oversold” but added he didn’t see any likelihood of investor sentiment toward BP improving anytime soon.

Analysts at Bank of America Merrill Lynch said the company could afford to pay its $28 billion estimate of spill costs but added there was massive uncertainty around the overall impact with a possible dividend cut, management changes and more limited growth opportunities in future.

Five-year BP credit default swaps rose 140 basis points (bps) to 520 bps, making a rise of 250 bps in two days, one trader said, implying that the cost of insuring BP’s debt against default had almost doubled in recent days.

The cost of the response effort to date has been around $1.43 billion, BP said.

 

Date created : 2010-06-10

  • US - OIL SPILL

    Lawmakers challenge decision to freeze oil drilling

    Read more

  • USA

    BP capturing 'half' of oil spill after $1.2 billion effort

    Read more

  • OIL SPILL

    BP’s vain efforts to stem the oil leak

    Read more

COMMENT(S)