Thursday, June 03, 2010

British Petrol: The end?

This oil spill fiasco in the Gulf may be the end of BP. The company has run through over $1B of it's $20B reserves with no end of liabilities in sight. Some commentators have mentioned there are thousands of Americans employed by BP and suggested it would be better if the company stayed together. There are other options,though.

BP took over Amoco back some years ago. It wasn't long afterwards that the Amoco executive crew left or were forced out. Then the trouble started; first with a discovery that BP was neglecting maintenance on the North Slope oil pipline. Other incidents followed over the years. BP management developed a history of taking risky shortcuts.

Which suggests an alternative to the present corporation, namely, spin off the American operation as Amoco with Americans as executives. Leave the remainder of BP under British management with that new British company inheriting the total of liabilities accrued under their management.

A former neighbor worked for Amoco back when it was taken over by BP. He posed this riddle to me one day: How do you pronounce BP Amoco? It's Bee-Pee. The Amoco is silent.


Update-June 10, 2010:  The idea of spinning Amoco off from BP was mentioned on CNBC this morning.

2 comments:

Trestin Meacham said...

I sure would hate to have stock in BP right now. I just hope that they are not taken over by a government.

Ron Russell said...

Trestin, if any country takes over BP it will be the Chinese. They will jump at the opportunity if it presents itself. They can drill where every they want with no safety concerns.