BP Faces Bad Press But Good Prospects
Oil and gas super-major BP (NYSE:BP) was flanked by mixed news on Wednesday. On one hand, a jury found former senior engineer Kurt Mix guilty of obstruction of justice related to the U.S. investigation into the 2010 Deepwater Horizon disaster. On the other, the company announced that 2013 was its most successful year for new field exploration in early a decade.
Shares traded fractionally higher early Wednesday afternoon following the news. The conviction, the first of several criminal trials set for individuals related to the 2010 spill, will not have any serious financial blowback for BP itself, and investors appear to have shrugged off the news. Mix, who worked on the failed top kill operation, was accused of two counts of obstruction of justice for destroying text messages and voicemails that contained information requested by U.S. investigators.
Mix was convicted of just one of the two counts, and his lawyer has asked the judge to throw out the guilty verdict, arguing that Mix did not have malicious intention in deleting the messages. The judge has deferred judgement, Mix is out on bond, and sentencing is set for the end of March.
In other news, BP announced that it will wrap up 2013 with a field exploration success rate of more than 40 percent. The company participated in 15 completed wildcat exploration wells — experimental wells that are drilled in unproven areas — seven of which can potentially be commercialized. BP announced a new exploration find in the Gulf of Mexico and confirmed news of a discovery in Brazil.
Some of the failed explorations will require write-offs totaling about $1 billion, but the news has not seemed to deter investors. BP’s 2013 upstream wins outweigh its losses.
BP also recently signed a deal to build a pipeline from a field in Azerbaijan to Italy to pump gasoline. The Shah Deniz field in Azerbaijan will be expanded to increase production by 16 billion cubic meters a year, according to BP. Bloomberg reports that the project involves drilling in the Caspian Sea and building pipelines through Turkey leading into Greece, Albania, and Italy. Oil from the Shah Deniz field will reduce the European Union’s dependence on oil from Russian monopoly OAO Gazprom, which currently transports a quarter of the EU’s oil that comes via pipeline.