U.K. draws up contingency plans for BP collapse
TEXT OF STORY
Steve Chiotakis: It’s been two and a half months since oil started gushing from the Deepwater Horizon well into the Gulf of Mexico. And since then, the Washington Post reports BP’s skimmed or burned about 60 percent of what it promised regulators it could remove in a single day. Meanwhile, the British government has reportedly become increasingly concerned that BP could collapse. The Times of London reports the government is drawing up contingency plans for such an event. Let’s bring in Marketplace’s Europe correspondent, Stephen Beard, he’s with us live from London. Hi, Stephen.
Stephen Beard: Hello, Steve.
Chiotakis: So this sounds pretty dramatic, collapse. What’s in this report?
Beard: Well, the Times is saying that the British government is preparing for the worst-case scenario, just in case BP is taken over by a foreign company or broken up and sold off. There’s a lot at stake for the U.K. I mean, BP owns a big chunk of the U.K.’s energy infrastructure, that includes a pipeline system out in the North Sea connecting 50 oil and gas fields. And it also ends a stake in the so-called BTC pipeline, this is the one that carries oil and gas from the Caspian Sea to Europe. So there’s a lot at stake here, quite apart from the fact that BP employs 10,000 people in the U.K. and pays around $8 billion in U.K. taxes every year.
Chiotakis: Mmm. What’s the government saying about this, Stephen?
Beard: The government is refusing to comment on the story. BP, however, has dismissed any suggestion that it will collapse. The company says, “We will recover from this.”
Chiotakis: And what is BP doing to ensure that recovery, that survival?
Beard: Well, we’re not entirely sure. There have been persistent stories that BP has been talking to sovereign wealth funds in the Middle East about raising extra cash there. Abu Dhabi, Qatar, Kuwait, Libya have been mentioned. BP says it has been urging investors to acquire more BP shares, but it denies that it’s contemplating issuing any more stock. That would be pretty explosive — I mean that would infuriate existing shareholders, who would find their holdings, which have already halved, fall further in value.
Chiotakis: Marketplace’s Stephen Beard, reporting from London. Stephen, thanks.
Beard: OK, Steve.
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