Just a couple years ago, BP (NYSE: BP) was riding high on their rebranding campaign from an oil company to an “energy” company. The hyper-futurist logo with clean shades of green and yellow made me feel like BP was positioning well for the growth of clean energy products.
Now, BP is the poster child for filth and destruction as they’ve overtaken Exxon’s (NYSE: XOM) reign as the most memorable manmade disaster in recent history. Exxon Valdez Shipmaster Shipmaster Joseph Jeffrey Hazelwood is somewhere singing sea songs to a few pints of ale.
All drinking games aside, the images from the Gulf of Mexico and Louisiana shores have sullied BP’s branding campaign and image. Insofar as tangible costs are concerned, the company is looking at something at least similar to the cost of Exxon Valdez:
- $2.5 billion clean up
- $1.1 billion in various legal settlements
- Mega-millions in legal fees fighting a $5 billion punitive damages obligation
- Loss of customers (a study by Porter/Novelli several years after the Exxon Valdez accident, 54 percent of the people surveyed said they were still less likely to buy Exxon products).
Although Exxon recouped a lot of costs through insurance claims, the damage to the company was significant. In BP’s case — which also includes Transocean (NYSE: RIG) and Haliburton (NYSE: HAL) — the damage may be worse because their Americas markets are directly affected (as opposed to some remote area only seen by Jack London and friends).
There are rumors BP may have plugged the leak. We sure hope so. But the ship may still sink.