Investors showing support to BP in London during US Gulf of Mexico oil disaster - Oil and Gas, UK

Amidst the current US Gulf of Mexico oil disaster facing it, BP, the worst performing oil investment so far this year on Wall Street, is finding supporters in London. Reports by Bloomberg’s money flow data indicate that BP investors have purchased more shares than they sold daily in June in London. BP stock fell to an all time 13 year low due to the disaster in its US offshore exploration in the Gulf of Mexico.

 

On the contrary though, BP’s American depository receipts (ADRs) recorded a net US$185 million outflow in New York since the disaster happened. Tony Hayward, BP’s beleaguered chief executive officer, is reportedly getting lots of investor backing from London even as the worst oil spill in American history continues to rack havoc in Florida’s beaches and the Louisiana marshlands, and the continued attacks from the American president, Barrack Obama.

 

BP has had a five year long period of disasters and accidents at its facilities that, according to its American representative, may be enough justification for the cancellation of the company’s operating permits in America.

 

However, according to Brewin Dolphin, investors in the UK feel that the company has been unfairly targeted and it still has long term value in its stock, adding that the disaster was a very emotive issue in America and politicians were turning it into a personal and vindictive matter. Brewin Dolphin manages over US$31 billion in London and increased its investment holdings in BP last month. But Hayward was not without his gaffes after drawing criticism when he went for a Yacht race in England, another in a long list of gaffes the company’s PR has been making.

 

BP last week said it would cancel nine months worth of investor dividend payments to save around US$7.5 billion, sell its assets worth US$10 billion and cut down its investments to raise money for Obama’s demand of a US$20 billion fund to compensate the oil spill victims.

 

W.H Reaves Chief executive, Ronald Sorenson said the media coverage was not helping BP’s campaign to salvage itself from the situation, subsequently putting pressure on advisers and individual investors taking it personally. W.H Reaves, based in New Jersey, manages US$1.6 billion in assets, inclusive of BP shares.

 

The London-listed stock is down 44 per cent since the explosion on the Deepwater Horizon rig that killed 11 workers and started the leak on the seabed. The shares fell to a 13-year low of £3.42 on June 15, wiping about £60 billion ($125 billion) off the company's value. BP closed at £3.57.45 on June 21.

 

23 June 2010.