BP shares fall amid oil seepage fears
Published 19/07/2010 | 11:27
A revival for BP shares after the placing of a cap on its ruptured well ended today amid fears that oil may be seeping from the seabed.
The energy giant had wanted to test its cap until it could open relief wells to stop the flow of oil, but the discovery of seepage and possible methane gas near the site in the Gulf of Mexico means there could still be leaks.
The US government has asked BP to submit a plan to reopen the capped well and pipe oil to the surface, which would ease pressure on the well but would require up to three more days of oil spilling into the Gulf.
BP shares fell by as much as 5pc today as investors reacted to the latest developments in the disaster, which began when the Deepwater Horizon rig exploded on April 20, killing 11 workers.
Shares dipped below 300p at one stage last month - the lowest point since August 1996 - but last week recovered to around 425p on signs that it is closer to tackling the crisis, which BP said today has now cost $4bn (€3.1bn) in spillage and clean-up.
Retired Coast Guard Admiral Thad Allen, who is in charge of the White House's response to the spill, has ordered BP to provide a plan for reopening the well.
In a letter to BP managing director Bob Dudley, he said: "When seeps are detected, you are directed to marshal resources, quickly investigate, and report findings to the government in no more than four hours.
"I direct you to provide me a written procedure for opening the choke valve as quickly as possible without damaging the well should hydrocarbon seepage near the well head be confirmed."
Doug Suttles, BP's chief operating officer, said last night: "No one associated with this whole activity... wants to see any more oil flow into the Gulf of Mexico.
"Right now, we don't have a target to return the well to flow."
Meanwhile, it was reported this weekend that BP is considering selling off its petrol stations.
Directors at the beleaguered oil group are understood to have held discussions with its major shareholders over restructuring the company following the crisis, according to the Sunday Times newspaper.
Options under consideration are thought to include splitting up the group by selling off its refineries and petrol stations, scaling back its US operations and doing more engineering in-house rather than outsourcing it.
The restructuring will come on top of the sale of around 10pc of the group's assets, which will be needed to meet the cost of the oil spill.
Discussions with shareholders are said to be at an early stage, but they will be used to help decide the direction of a formal strategic review, which is expected to be launched by the group's chairman Carl-Henric Svanberg once the ruptured well is finally sealed.
It is thought the restructuring of BP could leave it a significantly smaller firm, which would focus on exploration in emerging oil regions such as West Africa and Brazil, and lead to it selling off its less profitable downstream arm.
The downstream business, which is made up of petrol stations and refineries, employs around 51,600 people - more than half of BP's 80,300 workforce - but accounts for just 3pc of the company's pre-tax profit.
BP said last month that it was making a £13bn fund available to compensate people affected by the Gulf of Mexico oil spill.