The most pessimistic estimates of the cost of BP’s (horrific) rig explosion and the subsequent (potentially ecologically disastrous) oil spill in the Gulf have been pegged at £8.5 billion. Yet since the rig exploded on April 20th the company has lost as much as £17 billion off its market cap.
In contrast, Shell is mildly ahead over the same period. BP shares have rallied a little, but this valuation gap still looks too big to me:
Is BP really worth 10% less than Shell, forever on?
Six years ago, the shoe was on the other food after Shell’s reserves scandal hit its valuation. These things tend to balance themselves out over the decades.
(Source: Google Finance)
