Almost a year ago, investors became so nervous in the weeks following the Macondo blowout in the Gulf of Mexico that they briefly wouldn't lend to BP. They feared the British oil giant could be crushed under the weight of tens of billions of dollars in fines, cleanup costs, and payments to families of the 11 rig workers killed and businesses affected by the worst oil spill in U.S. history. They turned out to be wrong. Not only is BP still in business, it has more cash today than before the spill. Earlier this year the company negotiated massive energy deals in India and Russia. And, despite opposition from some in Congress, it has even resumed exploration in the deep waters of the Gulf.
Almost a year ago, investors became so nervous in the weeks following the Macondo blowout in the Gulf of Mexico that they briefly wouldn't lend to BP. They feared the British oil giant could be crushed under the weight of tens of billions of dollars in fines, cleanup costs, and payments to families of the 11 rig workers killed and businesses affected by the worst oil spill in U.S. history. They turned out to be wrong. Not only is BP still in business, it has more cash today than before the spill. Earlier this year the company negotiated massive energy deals in India and Russia. And, despite opposition from some in Congress, it has even resumed exploration in the deep waters of the Gulf.
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BP is "showing it can get off the canvas and still has some fight left," says William K. Reilly, co-chairman of the BP Deepwater Horizon Oil Spill and Offshore Drilling Commission appointed by President Obama to investigate the disaster. It "did a lot of things right," he says.
Robert Dudley, the American who became BP's first non-British chief executive officer in October, deserves much of the credit for the company's resilience. He's used the company's enormous earning power to help make peace with Washington. Last June, even before taking over from Tony Hayward, Dudley helped set up the $20 billion Gulf Coast Claims Facility trust fund that to date has handed out just $3.6 billion in awards so far to individuals and businesses hurt by the spill. By the end of 2010, BP had spent another $10.7 billion on the cleanup, including the cost of deploying skimming boats, floating oil booms, airplanes, and crews that combed beaches and swamps for oily residue. It has also promised $500 million for academic research on the Gulf environment and support for the region's fishing and tourism industries. "There are few companies with the resources to do what BP has done," says J. Robinson West, chairman of consultant PFC Energy.
What BP has not been able to do is erase the memory of the spill. The U.S. Justice Dept. is considering manslaughter charges against some BP managers stemming from the deaths caused by the blowout, according to three people familiar with the matter. That would be a setback to Dudley's efforts to burnish BP's reputation and revive its stock price, off 29 percent since the Apr. 20 disaster. And the company still has enemies aplenty on Capitol Hill. U.S. Representative Steve Scalise (R-La.), blames BP for the loss of 12,000 jobs thanks to the drilling moratorium that until recently halted new deepwater exploration. BP "hurts the rest of the industry in ways that aren't fair," says Scalise.
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