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19 July 2010 |
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators in the media. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor.
Justin Urquhart Stewart is one of the most recognisable and trusted market commentators in the media. Originally trained as a lawyer, he has observed the retail market industry for 20 years whilst at Barclays Stockbrokers and developed a unique understanding of the market's roles and benefits for the private investor. Justin provides financial advice to clients of Kester Cunningham John Financial Planning LLP.
At the time of writing this, the BP gusher appears to have been capped. If true and sustained, then in Churchillian terms this is "Not the end. It is not even the beginning of the end. But it is perhaps, the end of the beginning", because this is just the stopping of the core damage and nowhere near the stopping of the financial damage. It seems almost inevitable that the BP we know today won't be the same BP this time next year. From where we are and what we know today, BP is unlikely to go bust, unless this 'spill' becomes an unstoppable flow. However, it would seem to be far more likely that they will wish to demerge certain key assets before populist politicians seeking retribution decide to take precipitative action.
It is quite possible that BP thus seeks to find the best value way of finding new partners for its US operations or even selling it off altogether. At the moment names like ExxonMobil and Apache have been in the frame, however a more controversial but probably more valuable move would be to bring in the acquisitive Chinese oil giant CNOOC. Now would this cause a ripple of nerves amongst the political pigeons in the US if domestic oil fields could be transferred to another foreigner? As a 'strategic asset' would the US authorities block it as they previously did with the proposed CNOOC takeover of UnoCal the Californian based oil company? Yes, probably.
However, of course there would be a difference here as of course BP is a British registered company and thus what interference would be allowed? Nevertheless, given the previous somewhat predatory moves by US authorities into the corporate world, then this has to be quite a serious risk. In the core of the capitalist empire, direct state interference seems to be coming more acceptable.
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So what can we see for the rest of the year |
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