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Bp Shares Slump As Us Presses Oil Firm To Pay Laid Off Workers

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http://www.guardian.co.uk/environment/2010/jun/09/bp-oil-spill-us-anger

The political and financial pressure on BP escalated sharply yesterday as the US government demanded compensation for thousands of oil industry workers laid off as a result of a freeze on drilling in the Gulf of Mexico. The demand sent the company's shares plummeting on Wall Street amid worries over long-term survival prospects.

In an unexpected addition to BP's already huge liabilities from America's worst ever oil spill, the White House said it would press the company to pay the salaries of staff laid off as a result of a six-month moratorium imposed by the Obama administration on exploration activity in the Gulf. The freeze means a halt to work on 33 existing oil rigs, affecting thousands of jobs.

The warning, together with fears that the gush of oil in the gulf could be even worse than estimated, sent BP's American shares down 15.8% in a late fall on the New York Stock Exchange, pushing them to their lowest level since 1996. This was despite hopeful news from BP's operation to plug the undersea leak as it was revealed that the company collected 15,000 barrels of oil on Tuesday.

As many as 15 Congressional committees are investigating the oil spill and at one of many hearings yesterday, the US interior secretary, Ken Salazar, said he would ask BP to repay the salaries of workers laid off by the moratorium on drilling.

The White House press secretary Robert Gibbs later went further, saying the freeze is "a result of the accident that BP caused". He added: "It is an economic loss for those workers and those are claims that BP should pay. We believe it's an economic damage caused by this, not unlike losing business at your bait and tackle shop."

There were signs last night that BP was heading for a showdown with the administration over the issue. A BP source told Reuters that "at some point a line has to be drawn".

As it struggles to stem the oil gushing from its ruptured undersea well, BP has dispatched a giant oil tanker, the Loch Rannoch, from its North Sea operations off the Shetland Islands to the Gulf of Mexico. The ship will help to increase the capacity to collect oil from 18,000 barrels per day to 28,000 – a capability which, if required in full, would exceed the US government's top estimates of the scope of the spill, which range from 19,000 to 25,000 barrels per day.

So Obama gets to be an idiot and shuts down all the drilling and then says BP gets to pay for it all. Was there really any need to shut down all the wells? Would an immediate inspection of all the working wells have been more appropriate?

The administration it would appear is starting to panic it's made a policy decision that's had obvious consequences for the local economy and now they are panicking. I mean why not get BP to pay all the unemployed as they might have got jobs on the drilling rigs if they hadn't shut down.

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Obama's stance on this is just becoming a joke. It might wash in the media and with the general public, but if this went to court then I am sure BP could step back and minimise its financial losses. It's US reputation may be left in tatters, but people will forget and move on.

The share are now the lowest they have been for more than 10 years, and at some point very soon I think I will max out this years share ISA with BP only. They are starting to look very cheap to me, even when factoring in the GOM situation.

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I sold all mine went they went ex div in early May. Best decision i've ever made.

Sitting tight at the moment waiting for another correction to reinvest it somewhere else. Vodafone look to be yielding about 7% , a far safer bet.

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I sold all mine went they went ex div in early May. Best decision i've ever made.

Sitting tight at the moment waiting for another correction to reinvest it somewhere else. Vodafone look to be yielding about 7% , a far safer bet.

I too sold all mine (a few months ago in my case)...

The real question is, when to buy BP again! ;)

I am feeling slightly tempted... anyone else have a point of view of when/if to buy BP?

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very much depends whether thats a lot of money to him.

To be honest, I don't think it is really. When my mate said about it he was gloom and doom but I said he can probably afford it... he used to work in the oil industry so I don't think he's scrabbling around for cash...

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I too sold all mine (a few months ago in my case)...

The real question is, when to buy BP again! ;)

I am feeling slightly tempted... anyone else have a point of view of when/if to buy BP?

I'd wait until they actually stop the oil leak.

Until then it's anyones guess how much this is going to cost them to clean up.

It could bankrupt them.

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I too sold all mine (a few months ago in my case)...

The real question is, when to buy BP again! ;)

I am feeling slightly tempted... anyone else have a point of view of when/if to buy BP?

With the exception of October 2008, can anybody give another example of such a quick massive loss in share price and a subsequent recovery of a similiar sized company?

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i am going to wait before having a punt on them, i think there are further falls to come, maybe another 10-20 %, then get in , unless this bankrupts them

Would Cameron actually have the stomach for this? Being serious, I'm fairly certain, a taxpayer backstop would occur if bankruptcy seemed inevitable. We socialise losses now on companies deemed too big to fail. With its pension exposure I think BP falls into this camp.

Who agrees/disagrees with this?

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My best predictions would be for Tony Hayward to resign in the next few months to be replaced by possibly an American CEO and for Obama to then make concilliatory noises towards the "new BP approach". Then there'll be greater visibility on BP's liabilities, the rhetoric will be ratcheted down and BP will scrap its dividend as dividend as a nod to the US Government. Shares should find a bottom around £3 then it may even qualify as a growth stock!

It's really unfair, as Hayward is much better than 'Lord' Browne who cut so many corners during his time and also the fault lies with Transocean. But life sometimes ain't fair.

P.S. Good to hear Lord Tebbit giving it both barrels :P to Obama on the Today programme.

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My feeling is buy under 300... and I believe they could easily test that in the next fortnight. I generally don't worry about missed opportunities though, so I will play a wait and see game rather than putting a buy order on. Of course there will be large risks of further short term losses, but as a long term income provider I think they will make a nice ISA wrapped punt.

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i am going to wait before having a punt on them, i think there are further falls to come, maybe another 10-20 %, then get in , unless this bankrupts them

What sign are you looking for to do this, and how will you be able to see it when the rest of the market can't?

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What sign are you looking for to do this, and how will you be able to see it when the rest of the market can't?

From what I've read the upper estimates of BP's liabilities are $20bn - they can easily take that on the chin through reserves and cashflow. What the market's worried about is that the US govt. will kick BP out of America (legally of course!), stop them from providing fuel to their military around the globe or that American consumers will boycott BP forecourts en masse. If you think these scenarios are unlikely, then BP is a buy.

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I'd wait until they actually stop the oil leak.

Until then it's anyones guess how much this is going to cost them to clean up.

It could bankrupt them.

a bankrupt BP wont be paying for cleanup.

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Would Cameron actually have the stomach for this? Being serious, I'm fairly certain, a taxpayer backstop would occur if bankruptcy seemed inevitable. We socialise losses now on companies deemed too big to fail. With its pension exposure I think BP falls into this camp.

Who agrees/disagrees with this?

The tax hit the UK will take is massive. BP pay billions, best way to save money is pull out of Afghanistan, if US is going to us UK as a whipping boy, let their troops die instead. If they want to make this a nationalism issue, fire the Amaco employees, shut down the US oil production and refineries and pull out of the US. Lets see how they complain when Petrol hits $10 per gallon and they have shortages - at least they can be happy that US companies are ripping them off for their beloved gasoline.

Incidentally, this accident has added $9 to future (2014) oil prices; its probably going to be a lot more when other companies back out of deep sea exploration (which is where most future oil finds are expected).

From what I've read the upper estimates of BP's liabilities are $20bn - they can easily take that on the chin through reserves and cashflow. What the market's worried about is that the US govt. will kick BP out of America (legally of course!), stop them from providing fuel to their military around the globe or that American consumers will boycott BP forecourts en masse. If you think these scenarios are unlikely, then BP is a buy.

US only accounts for 30% of BP business. Oil is going to be a sellers market in future so the US better start finding alternatives to oil damn quick (will never happen)

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On a lighter note, has anyone seen that film 'Gold' with Roger Moore? The plan was to flood a gold field, sell their shares in that company while simultaneously buying other gold mining shares as the price of gold rocketed.

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What sign are you looking for to do this, and how will you be able to see it when the rest of the market can't?

well never can find the bottom of the market obviously, but until they stop the escape of the oil and all the cleaning up bill, then i will be looking to get in, the thing is, it does not matter if you never find the bottom of the market, but i would think it would be about 310 mark, if it is 320 and i buy at 330 that is ok too, as there will be some big rises when it is all over. all my opinion of course, but finding the absolute bottom of the market is something i have never been able to do,

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What this all proves is that Obama is no Winston Churchill, who banged idiout Government types heads together to get jobs done in the war, or got rid of them....quick.

Just back from Normandy where they have a museum where the artificial dock was made. Winston is credited for just telling the civil servants...who said it was impossible to build, to get it done.

Obama is crippled by the local Authorities fighting over how to block their inlets and fisheries from the oil. Parrently, one fire Cheif is doing something...but its illegal...hes sinking boats and closing an inlet...all totally illegal...so he risks prison for doing it...saving the fisheries and inlets.

Winston would have waved all the red tape, and dealt with the problem...which is oil pollution...they all seem to be in a tizzy about how they open them up again after the spill, and who is going to be liable for the illegal actions, which are required to save the thing.

reminds me of the quartermaster refusing to issue ammo to troops under attack because the write forms werent signed.

Obama is weak...closing ALL the oil wells acheives what? maybe he suspects the government overseers are corrupt...maybe they are...but he needs to deal with that now...suspend them all...now....then make rig managers personally criminally liable for problems if they are cutting corners, then we would see which rigs were dodgy and which the managers are confident will perform.

Grow some balls Obama.

and stop attacking everyone else for failures in your own system. BP are not liable for actions by Government. Cameron should tell Obama to shove our orders for Trident, and our troops are coming home....today.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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