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Originally Posted by ring
Oh, and I am all for the immediate seizure of BP's assets.
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How do you explain Tony Hayward's (CEO of BP) swagger?
Not only is he not thinking about being fired or resigning, he is positioning himself to be the greatest corporate leader of all time. Is he clueless? Simply arrogant? What is the deal? Questions I have been thinking about.
First, BP has as of 12/31/09 balance sheet - $8.3 billion in cash. $30 billion in receivables. $22 billion in inventory. and about $7 billion in other current assets. These numbers are just their current assets not total some of which would be illiquid. Total shareholder equity is at $102 billion.
In 2009 their net income was $21 billion. The market cap of the company (shares outstanding x share price) is $117 billion even after the dramatic drop in the share price.
Let's assume about $20 billion to clean up the Gulf, that is about a one time hit to one year's profits. But, they are recovering 6,000 barrels of oil per day even with an ineffective "cap". Oil trades at about $70 per barrel. Even today they are getting $420,000 per day or $153,300,000 per year before costs.
The well has not been shut down, the government has not taken any steps to remove BP from the "project"...
...know this is the kicker...
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June 7 (Bloomberg) -- The oil market is signaling that prices have nowhere to go but up as the biggest spill in U.S. history curbs drilling and makes it more expensive to develop new fields.
Crude’s premium for delivery in eight years compared with today’s price rose 86 percent since the BP Plc-leased Deepwater Horizon rig in the Gulf of Mexico exploded April 20. Oil for December 2018 is $21 a barrel more than next month, compared with $11 before the disaster. More regulation may add $5 to the contracts in coming years, according to Deutsche Bank AG.
President Barack Obama extended a ban on new deepwater permits and exploration by Royal Dutch Shell Plc in the Alaskan Arctic for six months, putting off-limits as much as 23.2 billion barrels of potential resources, equal to 76 percent of all reserves proven in the U.S. The number of rigs drilling in the Gulf of Mexico plunged 50 percent last week to the lowest level in 16 years, Baker Hughes Inc. reported June 4.
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BP Spill Shows a Profit Buying 2018 Oil, Selling Spot (Update2) - Bloomberg.com
...the long-term value of all of their oil producing assets went up. Do you think the future value will be grater than the cost of "clean-up"? I am betting it will be.
Not only will BP not get "fired", they are not going to have assets seized, they are going to get through this, run ads for positive PR, pay dividend when things settle down, and thanks to Obama make... mo' money, mo' money, mo' money...you got to love it when government takes care of big business while pretending to be really, really mad...so mad that Obama even clinched his jaw in a meeting once - according to his press secretary.
Oh, and how many times do you we get to say BP lied to us before it simply sounds silly? And who do we want creating a new regulatory system, is it the folks getting lied to???
This is all why the CEO of BP walks and talks with a swagger.