SHARES in BP are expected to plummet today as news of the failed “top kill” attempt to stem the leak of oil into the Gulf of Mexico hits the UK and US markets when they re-open after the long weekend.
Analysts predict that should the markets remain stable, it is likely that BP shares will fall by up to 10 per cent.
“The company can easily fall another five to 10 per cent if the market is stable. The success rate [of the top kill] was [said to be] 60 to 70 per cent meaning that the market was waiting for a success,” said Alexandre Andlauer, analyst at AlphaValue.
On Friday, BP shares fell b five per cent 494.80p despite news it had launched the top kill phase, which saw the oil major pump mud through the broken blow-out preventer on the sea bed and into the well.
BP admitted over the weekend that after pumping 30,000 barrels of mud and debris – including golf balls, tyres and pieces of rope – into the well, the operation did not stem the flow of oil.
BP and the US government have said they will now try to re-route the flow of oil to a tanker, another uncertain method never carried out before in 5,000 feet of water. This technique could reduce the flow of oil but is unlikely to stop it altogether.
It is said that if the latest efforts to plug the leak fail, the rate of oil spilling into the Gulf could increase by 20 per cent and continue well into the summer.
ROBERT DUDLEY, the former head of the TNK-BP Russian joint venture, is no stranger to unusual scenarios and difficult challenges.
Renowned for having been forced into hiding two years ago by a number of angered Russian oligarchs, Dudley has recently been appointed by BP to take on the task of heading up the group’s newly-created disaster management organisation to deal with the oil spill.
Dudley, who was selected to sit on BP’s board as a director last year, will take responsibility for managing BP’s coastal restoration, legal settlements and co-ordination of clean-up efforts. He will also try to improve the company’s battered reputation after the spill in the Gulf of Mexico.
He led TNK-BP for five years until a revolt by Russian shareholders Alfa, Access and Renova forced him to leave the country. Prior to that Dudley held a number of roles at BP.