The potential implications of the Deepwater Horizon oil spillage on BP's share price Free essay! Download now
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The potential implications of the Deepwater Horizon oil spillage on BP's share price
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| Words: 1187 | Submitted: 07-Aug-2011
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The potential implications of the Deepwater Horizon oil spillage on BPs share prices
On Tuesday, April 20th news broke that an explosion occurred on BP's Deepwater Horizon oil rig in the Gulf of Mexico. There was a total of 126 workers aboard the rig at the time of the blast. The rig was drilling, but not in production. On Wednesday, April 22th helicopters and ships resumed the search for 11 missing workers. The oil rig was still burning, leaving a huge plume of smoke that was more than 30 miles long. Later that day, the fire was extinguished, after which the oil rig sank. At this point environmental damage was believed to be minimal, due to the fact that Deepwater Horizon was an exploration rig, as opposed to a production rig. A few days later rescue operations got suspended with 11 people still missing, while BP used underwater technology to ascertain that there were at least two leaks that were dumping an estimated 5,000 barrels of oil per day into the sea. It was at this point when officials warned it could take "months" to stop the leaks. It was this that brought to light the full potential environmental damages of the leak. It was in fact on July 15th when the leak was finally capped, over 210 million gallons of oil had been lost; the largest on record. The increased risk of environmental damage and the issue of whose fault the disaster was, were bound to affect BP’s share prices at the present and in the future. President Obama stopped all offshore drilling in the south east on the USA for two months.
Share price is the value given to one share in a company at a given moment. Share values change all the time due to differing levels of demand at any given time within the market. In financial markets, a share is a unit of account for various financial instruments including stocks and investments. Shares are valued according to various principles in different markets, but basically a share is worth the price at which a transaction would be likely to occur were the shares are to be sold. An actual sale transaction of shares between buyer and seller is usually considered to provide the best face-value of shares at that particular time.
BP – as a company
BP is a public limited company, and is the fourth largest company in the world. It undertakes operations in around 85 countries. It’s primary share listing is on the London stock Exchange, and is one part of the FTSE 100. It produces around 3.8 billion barrels of oil per day and has over 22,000 service stations worldwide. BP's track record of ...
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