Knock on effect of BP's $20 Billion cleanup....

StevieJ

BP shares have recovered a little today + 8%.

chucky

wymondham wrote: »

.... am I right in thinking I heard that BP is an important pension source for many people (beyond their employees etc)?? If so, what is the effect this big dent is likely to make to the UK pensioner??

with the bonds being moved down a couple of notches - does that impact funds who hold shares.

i know they're different but is there any regulation that funds are only allowed to hold a maximum number of shares for firms with a certain rating?

StevieJ

Interesting analysis, from a Septic.

Could BP be forced into bankruptcy by lawsuits, fines and penalties? It could be, but given the above cash flow numbers, I see that as unlikely. In addition, if backed into a corner by an administration more interested in finger-pointing and finding a scapegoat than in partnering with energy providers, BP could say “Enough. We cannot stand idly by as your whipping boy while you drive our company into bankruptcy.” If that happens, and they are forced to play hardball to survive, we need to remember that the value of the “responsible party” (BP America) is about $25 billion. Anytime the US government decides to finance its deficit spending and its various gifts to Wall Street by riding BP into the ground, BP “could” simply declare BP America insolvent and let everyone pick among its bones. That would still leave BP the 75% of its business conducted beyond US shores, with roughly 75% of its current $30 billion annual cash flow intact. I see the bankruptcy of the entire company as unlikely and assign only a 10% probability to that occurence

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http://www.stockopedia.co.uk/content/is-bp-plc-headed-to-70-or-0/43271

ash28

wymondham wrote: »

.... am I right in thinking I heard that BP is an important pension source for many people (beyond their employees etc)?? If so, what is the effect this big dent is likely to make to the UK pensioner??

I've just looked at my pension scheme's investments and 1.5% of the assets are held in BP shares, I'm not concerned as pension funds don't look at the short term. Even if BP go bust I'm not too concerned, pension schemes seem to spread their investments far and wide - I suppose to minimise risk.

How it will impact individual investors, could be quite badly I would think.

1984ReturnsForReal_2

headcone wrote: »

I will cos I know;)

So there was a rush on buying.

Doesn't mean its good for the buyer but the traders have done well.

Now it will pan out & go up or down a little until it hits them that $20bn aint enough money....

Thrugelmir

ash28 wrote: »

I've just looked at my pension scheme's investments and 1.5% of the assets are held in BP shares, I'm not concerned as pension funds don't look at the short term. Even if BP go bust I'm not too concerned, pension schemes seem to spread their investments far and wide - I suppose to minimise risk.

How it will impact individual investors, could be quite badly I would think.

Pension funds hold (held) shares in the banks , yet no one commented back in 2008.

As you say holding a diversified portfolio is the key.

Wookster

Obama would do well to remember the contempt with which Union Carbide treated safety in his Indian plant.

At least 2,259 people died. Babies are still being born with deformities.

The US refused to extradite Warren Anderson.

$2M was placed into an account similar to the $20bn BP has placed in escrow.

Disgusting!

Generali

Before we get too excited, take a look at the BP forum on the Fool website:

http://boards.fool.co.uk/bp-plc-bp-50207.aspx?mid=11953714

Lots of interesting posts on there including a discussion about which bits of BP are and aren't in US hands. According to a couple of posters, BP USA can be demerged from the rest of BP and be allowed to sink or swim as the situation permits. The US Government probably doesn't have any realistic way to act against the rest of BP and the Directors would be in breech of the 'fiduciary responsibility' they hold to their shareholders if they voluntarily pay out from the rest of BP more than the value of BP USA.

No idea if it's true or not. The arguements are very convincing though.

setmefree2

Wookster wrote: »

Obama would do well to remember the contempt with which Union Carbide treated safety in his Indian plant.

At least 2,259 people died. Babies are still being born with deformities.

The US refused to extradite Warren Anderson.

$2M was placed into an account similar to the $20bn BP has placed in escrow.

Disgusting!

Couldn't agree more. The self-righteous indignation from Obama has turned my stomach and, I have to say, he has really gone down in my estimations. (Not that he cares LOL.)

The yanks go around this planet polluting without a care - well now they've really gone and done it....

ash28

Generali wrote: »

Before we get too excited, take a look at the BP forum on the Fool website:

http://boards.fool.co.uk/bp-plc-bp-50207.aspx?mid=11953714

Lots of interesting posts on there including a discussion about which bits of BP are and aren't in US hands. According to a couple of posters, BP USA can be demerged from the rest of BP and be allowed to sink or swim as the situation permits. The US Government probably doesn't have any realistic way to act against the rest of BP and the Directors would be in breech of the 'fiduciary responsibility' they hold to their shareholders if they voluntarily pay out from the rest of BP more than the value of BP USA.

No idea if it's true or not. The arguements are very convincing though.

I haven't looked at the forum - but I did read that 25% of BP was in the US and that they could put the US segment into bankruptcy but leave the rest intact.

I suppose there is always the possibility too, that they could be banned from operating in the US.

BP is the leading producer of oil and natural gas in the United States and the largest investor in U.S. energy development












The BP family of brands includes Amoco, ARCO, and BP gasolines, as well as am/pm retail outlets and Castrol motor oil.






Investing in American Energy



Since 2004, BP has invested over $35 billion in the United States to increase existing energy sources, extend energy supplies and develop new low-carbon technologies. BP employs more than 29,000 people in the US, has $48 billion in fixed assets, and sells more than15 billion gallons of gasoline every year.

http://www.bp.com/sectiongenericarticle.do?categoryId=488&contentId=2000734