For the past couple of years, it appeared that BP
As The Wall Street Journal noted on Wednesday, when the now-controversial Tony Hayward suddenly became CEO in May 2007, he maintained that he would focus "like a laser" on safety, referring to a host of blemishes that preceded his tenure. They included the company's 2005 Texas refinery explosion, which killed 15; a leaking Alaskan oil pipeline, which continues to have problems; and a general company attitude in which cost controls trumped safety.
In fairness, Hayward's regime has not been without successes. The company -- along with ConocoPhillips
Then came April 20 of this year. Needless to say, despite numerous attempts to kill it, the company's blown-out well continues to gush oil, destroying the Gulf's environment and possibly its economy as well. The tab for BP from this horror already includes a $100 billion plunge in its market value, along with untold tens of billions in clean-up costs, fines, and compensation charges.
The final bill will be a doozy. It's clear that BP will be forced to sell assets to stay out of hock. Indeed, the entire company might go on the block, a possibility that has popped up periodically since the spill began. It's now being brought up again, and you won't be surprised to know that potential post-spill buyers may include ExxonMobil
Given the time until the relief wells now being drilled are expected to help halt the destructive gushing, a takeover seems more likely by the day. And with 40% of BP's reserves in the Gulf, a prohibition against its working in the U.S. -- not an unrealistic possibility -- could deeply slash the buyout price the company might command.
Nevertheless, I'd wager that a takeover would most likely involve Exxon. The biggest of Big Oil has the ideal balance sheet, along with a solid management team with experience integrating a sizable acquisition. So let's stay tuned to these changing events. In the meantime, a few shares of ExxonMobil wouldn't hurt your portfolio.