Things just don't seem to get easier for BP
While the current shutdown likely will last only a few days and shouldn't have a meaningful effect on world energy prices, it nevertheless is just the latest gremlin to affect Europe's second-largest integrated oil company -- behind Royal Dutch Shell
Further, Russian environmental officials today began an inspection of BP's big Kovykta natural gas field in Eastern Siberia. The inspection relates to a failure to meet agreed-upon production obligations. A negative finding could lead to the revocation of the operation's license. The TNK-BP joint venture between BP and private Russian investors has been producing less than a third of the 9 billion cubic meters of gas to which it is obligated, with the partners contending that the area served by the operation is insufficiently populated to absorb a higher production rate.
Last month it was announced that BP's longtime CEO Lord John Browne would retire prematurely as a result of both the earlier operational difficulties and his admission that he made a false statement to a British court in a case related to a personal relationship. Browne has been replaced by Tony Hayward, the company's former head of exploration and production.
So let's take a look at BP in light of its newest pair of difficulties. While the loss of Kovykta's license would hardly be a positive for the company, until I know more, it appears that the environmental inspection could be subterfuge relating to the escalating efforts of the Russian government to wrest existing production from private western companies.
As to Alaska, the partial shutdown clearly will be relatively brief. In fact, its relatively widespread coverage likely was intensified by BP's earlier Alaskan shutdown.
So there is no doubt that BP has been figuratively snake-bit of late. But given that this is a huge company with a market value north of $200 billion, worldwide operations, and new management -- along with trading at a discount to, for instance, ExxonMobil
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