Big Oil’s not quite so big anymore.
BP, Anadarko Petroleum, Transocean, Halliburton and Cameron — all big-time industry players who had a role in the Gulf Coast oil spill — have each seen the value of their stocks drop significantly since the Deepwater Horizon explosion. BP’s market capitalization, for instance, is roughly $73 billion less today than it was before the blowout in the Gulf.
The trend may very well be temporary and short term. But for now, regardless of the extent to which BP’s on the hook for footing the bill for the leak’s containment and cleanup, a couple things seems clear: These companies appear to be losing enormous amounts of money — at least as far as their long-term value is concerned. And Wall Street doesn’t seem to be very confident that they can escape this episode unscathed.
Over the last several weeks, the liability cap on BP — which puts a ceiling of $75 million on economic damages BP would have to pay for — has received a ton of media attention. Congress has introduced legislation to raise the cap to $10 billion. The concern, it seems, is that BP not get off too easy in what has become the largest oil spill in U.S. history.
But at least from a market perspective, none of these corporate giants look to be getting off too easy.
According to the Wall Street Journal, by Tuesday afternoon, the five companies — BP, Anadarko Petroleum (which had a stake in the well), Transocean (rig owner), Halliburton (allegedly faulty cement job) and Cameron (allegedly faulty blowout preventer) — had lost a combined $100 billion in market value since the spill began. The market is fluid and the numbers keep moving. On Tuesday afternoon, the Journal said BP had lost $69 billion of its market cap, while by Wednesday the AP put BP’s devaluation since the explosion at $73 billion. BP’s stock took a 15 percent hit on Tuesday and then partially rebounded Wednesday.
But regardless of the minute-to-minute and day-by-day swings, the overall trend seems clear: down, down, down.
From the Journal:
Combined, the five companies have lost 36.6% of their market capitalization since the week in which Deepwater Horizon exploded and later sank, spewing millions of gallons of crude oil into the Gulf of Mexico.
