Oil Spills Make BP Believed Not Bankrupt

New York EXCHANGE- The cost of handling oil spills in the Gulf of Mexico to reach billions of dollars. However, it is believed will not make a BP as a contractor becomes insolvent. British oil company that still has plenty of money to fix them.

So far, BP has reached around U.S. $ 1.5 billion to handle oil spills in the Gulf of Mexico. The amount is predicted to continue to rise given to this problem is not too exhaustive even more widespread impact.

That led to speculation BP will soon be registering for bankruptcy protection to avoid lawsuits. But Fadel Gheit, an analyst with Oppenheimer dismissed such speculation. According to him, will enter bankruptcy protection only to protect the assets of which are incalculable liabilities and at the same time taking care of business without any interference lawsuits.

In the midst of political pressure, Gheit believes, run the company out of business will not solve the problem of oil spills, complete liability to the plaintiffs, helping 23 000 U.S. workers, or even retirees.

Meanwhile, Citigroup analyst Mark Fletcher raise the risk ranking of BP from medium to high. This was based on estimates that the maximum BP would reduce the value of its stake to U.S. $ 40 billion.

"We realize that the little certainty about costs or definitions for the handling of such oil spills to the stockholders of BP. Costs and expenses incurred is still unclear, but we've made an adjustment up to four times what we believe is the most reasonable cost," says Fletcher as quoted in Forbes, Friday (06/11/2010).

Fletcher also noted BP's financial condition is still very good. Currently BP's total net debt is predicted to reach U.S. $ 25 billion, with underlying assets of about U.S. $ 130 billion, not including the contribution from the U.S..

He also estimated that BP managed to scoop up cash flow US4 40 billion per year in 2011-2013.

BP recently decided not to declare dividends, after the U.S. government asserted BP should provide funds to complete the obligations of the oil spill. But Fletcher said, in financial terms there is no reason why BP could not accommodate its obligation to pay dividends as well as completing an oil spill.

"Although it does not pay (dividends), the shareholders still enjoys a solid payment. If BP decides not to pay dividends in the second quarter to satisfy the politicians, the annual rate of return is still predicted to grow 6.8%," he added.

Oil spill crisis, which became one of the worst disasters in the U.S. has eroded the value of BP shares. In trading Thursday (10/06/2010), on the London Stock Exchange, shares of BP dropped to 15.7% and fell below U.S. $ 30 per share as investors worried about the cost of handling the problem of oil spills in the Gulf of Mexico it would be swell. Yet on April 20, or when an explosion which caused oil spill, BP shares were at the level of U.S. $ 60.48 per share.

BP shares slump to continue until the trade in Europe. On the London Stock Exchange, BP shares had dropped to 330 pence before finally improved to 372.4%, or down 4.87% compared to previous closing. But in trading Thursday (06/10/2010) on Wall Street, shares of BP Plc, which was hit hard in finally rebounded sharply by 12.3%.