BP shares fall amid charges report
BP shares came under pressure today as it was reported that staff at the beleaguered oil giant could face manslaughter charges over the Gulf of Mexico oil spill.
US prosecutors are understood to be considering whether to pursue manslaughter charges against BP managers for decisions made in the run up to the Deepwater Horizon explosion that killed 11 workers.
Investigators are also examining statements made by BP bosses – including former chief executive Tony Hayward – during congressional hearings last year to determine whether their testimonies were misleading, according to the Bloomberg report.
BP was battered from all angles as it suffered ongoing woes over its deteriorating deal with Russian government-owned Rosneft, while independent advisors PIRC recommended shareholders oppose BP’s remuneration report amid concerns over pay plans. Shares fell as much as 3% on the FTSE 100 Index.
BP and its new chief executive Bob Dudley are still moving to restore the firm’s reputation and financial position in the wake of the Gulf of Mexico disaster which caused the biggest offshore spill in history.
Investigations are still ongoing into exactly what happened on the Deepwater Horizon rig on April 20, but a chain of events including mechanical failures and human error have emerged which could explain the explosion.
The reported manslaughter investigation, being led by the Department of Justice’s criminal division, is said to be focusing on decisions by BP managers leading up to the explosion that may have sacrificed safety in favour of speed and cost savings.
The company is also still reeling after a Swedish tribunal last week ruled a £10bn (€11.3bn) deal between BP and Rosneft should be put on hold because of a dispute with shareholders at Russian partner TNK-BP.
The deal – hailed by BP as “groundbreaking” when unveiled in January – would have paved the way for BP and Rosneft jointly to explore the south Kara Sea in the Russian Arctic.
To compound troubles, Standard Life Investments, one of BP’s top 10 investors with a 1.6% holding, withdrew its backing for the Rosneft deal.
David Cumming, Standard Life’s UK equities head, told the BBC: “At the moment we don’t think BP has got a Plan B so unless there is some clear commercial benefit to BP shareholders for doing this deal, we’re not supportive at the moment.”
And it now risks further shareholder ire of its executive pay plans after PIRC issued a recommendation against backing the company’s remuneration report as it claimed Mr Hayward and Andy Inglis, former chief executive of exploration and production, could earn £8m (€9m) and £6m (€6.8m) from vested performance shares.
The group said the pay package was “excessive” and the proposed payouts for Mr Hayward and Mr Inglis were “wholly unacceptable”.
BP and the DoJ were not immediately available for comment.
