Analysis: Spill settlement closure leaves BP open to growth, takeover
By Karolin Schaps and Ron Bousso
LONDON (Reuters) - BP's $18.7 billion settlement over the 2010 Gulf of Mexico spill draws a line under years of uncertainty to allow it to focus once again on growth but could make it an acquisition target.
The British energy giant, whose shares are still some 35 percent below their value before the largest offshore spill in U.S. history, still faces headwinds from the sharp decline in oil prices and its large exposure to Russia.
The settlement lifts a huge weight off Bob Dudley, BP's first U.S. chief executive who was appointed leader just six months after the oil spill. He was tasked with rebuilding a company responsible for one of the world's worst oil spills after an explosion on the Deepwater Horizon rig killed 11 people died and has since faced an indefinable mountain of legal claims.
"For us this is closure for the major legal proceedings from the event," Dudley told reporters on Thursday. "This makes it much clearer in terms of planning the future of the company and managing and phasing our investments."
For BP, which made $3.78 billion in profit last year, putting a figure on the spill bill will allow it to count its spare cash and start thinking about where to spend it.
"We'll be able to spend more time on what we do well; which is finding, producing, developing, selling products in oil and gas," Dudley said.
The news of the settlement was received with relief among investors, too with BP shares soaring nearly 5 percent following the announcement.
"This settlement brings clarity and certainty for the future payments so that is sort of a relief," said Jean-Pierre Dmirdjian, analyst at London-based Liberum brokerage. Continued...