It has been eight years since the Deepwater Horizon oil spill in the Gulf of Mexico – considered to be the largest marine oil spill in the history of the petroleum industry.
And BP has been hamstrung in recent years by the legacy of the explosion and spill at the Macondo well, which killed 11 people. The disaster cost the London-based group $65 billion in fines and penalties, and by July 2016, BP had made significant progress resolving outstanding Deepwater Horizon claims.
Today, BP has processed more than 99 percent of about 390,000 claims under the Court Supervised Settlement Program and hopes to complete the remainder in the coming months. This leaves BP in a better position financially to proceed with the share buyback scheme, which it announced last October as it returned to financial health.
BHP’s massive failure in the shale sector
BHP’s foray into the U.S. shale sector seven years ago was fraught with problems from the very start. The London and Australia-listed group invested $20 billion and seven years later, it has spent almost the same amount trying to get their operation off the ground.
In August last year, BHP put its US shale assets on the block after the Elliott Management Corp. which had bought a 5 percent stake in the company agitated for the sell off of all the oil assets, including those in the Gulf of Mexico region.
According to The Street, the shale debacle accounted for ” $900 million of its total oil capital expenditure of $1.6 billion over year to the end of June, despite delivering just one-third of its total oil production of 86 million barrels and 40% of its total 636 billion cubic feet of gas.”
BP’s fortunes looking up
In a statement, BP’s boss, Bob Dudley, called the BPH deal “a transformational acquisition. This is… a major step in delivering our upstream strategy and a world-class addition to BP’s distinctive portfolio.”
BP shouldn’t suffer too much financial pain with the acquisition, even though BP shares fell 1.7 percent following the announcement in early London trading. But all this will be offset considerably by rising oil prices and BP will increase its US onshore oil resources by 57 percent.
Under the terms of the deal, BP ‘s American subsidiary will acquire Petrohawk Energy Corporation, which holds BHP’s Eagle Ford, Haynesville, and Permian assets in Texas and Louisiana, according to The BBC.
