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BP profits down as spill trial looms

Tuesday, February 05, 2013 - 01:41

Feb 5 - Fourth quarter profits from BP beat analysts' expectations, but three years after the Gulf oil spill the oil giant's share price is yet to recover. Why haven't investors rewarded BP for its transformation? Hayley Platt reports.

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It's three years since the devastating oil spill in the Gulf of Mexico and BP has transformed itself. But it's still struggling to make good profits. The oil giant made $4 billion in the final quarter of 2012. It beat expectations but was still down a fifth from a year ago. It's already agreed to pay a record $4 billion in criminal penalties relating to the 2010 disaster. But faces further fines next month from the Clean Water Act. That says Barclays' Will Hobbs is keeping investors at bay. SOUNDBITE: Will Hobbs, VP Research, Economics & Strategy, Barclays, saying (English): "If you take the best case scenario from what BP says in terms of what they spilt and also say that they're not done for gross negligence, it could be about $3 billion in terms of fines, however if you take the worst case scenario it goes up to $20 billion." BP has been trying to simplify its business - selling off non-essential wells and refineries to focus on key projects. It's halved the number of pipelines and upstream installations. And cut the number of wells it owns by a third. Last year it also sold its 50% stake in TNK-BP to Rosneft for $28 billion. In total BP has sold more than $37 billion worth of assets since the Macondo spill. Investor confidence is slowly returning, shares have recovered slightly but they're still only worth around £4.69 - 8 times lower than pre-disaster. And BP is certainly not the power it was - it's now the smallest of the world's four oil majors - three years ago it was no.2.

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BP profits down as spill trial looms

Tuesday, February 05, 2013 - 01:41