Yesterday, BP issued a bullish statement in response to suggestions it was covering up the extent of the spill. For investors however, there was little to stop the share price sliding further (it closed below £5 yesterday for the first time since July 2009). The oil major said there were “significant uncertainties” over how long it would take to stop the leak, let alone clean it up. The longer it takes, obviously, the more it will cost. It’s the not knowing that is spooking most shareholders.
The Obama administration, which is coming under attack for its own inefficient response, wants a pint of BP’s blood. A $500m 10-year investigation into the long-term environmental impact of the spill is just the beginning; BP will have to do much more to silence the baying mob.
Analysts point out that BP’s stock is now cheap, that the dividend is covered, that things might be alright. But you can’t blame investors for covering their ears.