Better or worse than expected? Almost impossible to judge when the sums are so large, which might be why the shares are currently unmoved today, despite BP’s huge charge and the sending of its CEO Tony Hayward to Siberia. Analysts are surely dazed and confused.
The reason for the loss is of course a huge charge for the Gulf spill:
BP announced today that it has taken a pre-tax charge of $32.2 billion for the Gulf of Mexico oil spill, including the $20 billion escrow compensation fund previously announced.
The company will also tell analysts later today that it plans to sell assets for up to $30 billion over the next 18 months, primarily in the upstream business, and selected on the basis that they are worth more to other companies than to BP. This portfolio high grading will leave the company with a smaller but higher quality Exploration & Production business.
Meanwhile BP continues to access new business opportunities, with new agreements in Azerbaijan, Egypt, China and Indonesia announced since the end of the first quarter.
The company said it was taking a prudent approach to managing the balance sheet and its financial liquidity, in order to ensure that BP has the flexibility to meet all of its future financial obligations. As a result it plans to reduce its net debt level down to a range of $10-$15 billion within the next 18 months, compared to net debt of $23 billion at the end of June. Group capital spending for 2010 and 2011 will be about $18 billion a year, in line with previous forecasts.
(Read more: BBC)
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I agree, Tony was in the wrong seat at the wrong time and if his contract allows for that pension it is only fair.
I agree that his largest sin was that he and BP was British and of course that the US politicians used BP to take the focus off the terrible state of the US economy.
I did not buy BP even though it was tempting, I just thought the situation was too unsure and I do not invest in win or lose all outcomes.
Great post.