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BP faces Mexico suit; Shell celebrates

Monday, December 14, 2015 - 01:40

Investors ask whether BP can withstand another major dose of legal pain after reports that the oil giant faces a class action lawsuit in Mexico over its deadly 2010 Gulf of Mexico spill. But, as Hayley Platt reports, there was better news for Shell.

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It's been just a few months since BP reached a record settlement in the U.S. over the 2010 Gulf of Mexico oil spill. The Deep Water Horizon explosion was the worst offshore oil disaster in U.S. history. Now BP faces another lawsuit. This time it's from Mexico. At the time the Mexican coast in the Gulf of Mexico wasn't affected. But later BP acknowledged there was environmental damage. Matthew Beesley from Henderson Global says BP is in good shape to withstand more legal pain. (SOUNDBITE) (English) HENDERSON GLOBAL INVESTORS, HEAD OF GLOBAL EQUITIES, MATTHEW BEESLEY, SAYING: "While the overhang from litigation relating to Deep Water Horizon hangs large still, the balance sheet now is able to very easily cope with any marginal increase in litigation costs despite the current low prevailing oil price." Eleven workers were killed and millions of barrels of oil spewed onto shorelines of several states. In July BP agreed to pay up to 18.7 billion dollars in penalties to the U.S. government and five states. That was on top of almost 44 billion dollars it had already set aside. A Mexican court will need to decide whether to accept the suit as a class action. In the meantime, investors don't seem too concerned. (SOUNDBITE) (English) HENDERSON GLOBAL INVESTORS, HEAD OF GLOBAL EQUITIES, MATTHEW BEESLEY, SAYING: "The context of the discount that we believe BP still trades under ... is unlikely to make a material difference to the underlying investment case." It was better news for Royal Dutch Shell. It's been given unconditional clearance by China to a proposed 70 billion dollar merger with BG Group. It was their last regulatory hurdle - the deal now on track for completion early next year.

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BP faces Mexico suit; Shell celebrates

Monday, December 14, 2015 - 01:40