Market Analyst: ‘BP’s Not Going to Last as a Company More Than a Matter of Months’
Energy investment banker tells CNBC clean-up of Gulf oil spill will cause ultimate end of beleaguered oil giant
By Jeff Poor
Business & Media Institute.org
We’ve heard politicians, even conservative Republicans, suggest BP would be held completely responsible for the devastation caused by the oil spill plaguing the Gulf of Mexico, even if it means its very existence.
That in fact might be the case for BP as the magnitude of the spill increases day by day according to energy investment banker Matt Simmons, the chairman emeritus of Simmons & Co. International. Simmons, in an appearance on CNBC’s June 8 “Fast Money” said in the long-term this would force the country to reevaluate how oil drilling and exploration would be done in the United States.
“It’s almost a certainty that we’re going to step back and say we didn’t have the toolkit to safely go to these water depths, let alone go to these ultra-deep highly pressurized formations,” Simmons said. “I think once the moratorium ends, we have to build a new generation of equipment. So this, these rigs will all migrate to the international markets, to Turkey, to the Black Sea. Brazil could use every deepwater rig. I think the service companies are going to be exonerated when this is all through because it was all BP’s fault.”
But when Simmons was asked how to play this in market terms, he declared that BP would cease to exist as a company.
“I think BP’s not going to last as a company more than a matter of months,” Simmons said.