Big oil untouched by negative press?

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Looking at BP and Shell stock with their recent press.

Oil and petroleum companies such as BP and Shell have some of the largest revenues and public trading in the world, but no matter how grand their success, each has their share of negative press.

In a game of “Where are they now?” let us see how Shell and BP’s stock react to recent press highlights.

Earlier this July, Shell gained ill press as six female Greenpeace activists scaled the walls of the Shard skyscraper, located between Shell’s three London headquarters. Peacefully protesting oil drilling in the Russian Arctic, the women began climbing at 4 a.m. and finished their ascent just after 7 p.m.

“If we don’t stop them, a major Arctic oil spill is inevitable,” explains Greenpeace in their website video, Save the Arctic.

The problem Greenpeace has with Shell is their deal with Gazprom. According to Greenpeace, “Gazprom, a Russian company, has a long history of oil spills and cover-ups. Gazprom’s equipment is decades out of date and in 2011, one of its rigs capsized and sank with 53 members of the crew on board. Shell is happy to put the Arctic…at risk by quietly signing a deal with Gazprom.”

In a statement given to BBC, Shell explains industry in the Arctic is, “not new.” According to their website Shell says, “As we work to help meet the world’s growing energy needs, we aim to reduce the environmental impact of our operations.”

But perhaps these companies should be watched? Platform, an activist group, reports, “This deal brings together two companies with scandalous records in trying to drill in ice-covered waters: Shell’s repeated misadventures off the coast of Alaska and Gazprom’s attempts to get the first oil out of the Prirazlomnoye field in the Russian Arctic have made headlines.”

Platform is referring to Shell’s series of mishaps off the coast of Alaska in 2012. According to the group these hazards include, “failure to secure timely certification of its containment ship…the failure of safety testing on its containment dome, operational issues with its drilling rig the Noble Discoverer and the running aground of its other drilling rig the Kulluk on 31st December 2012.”

This year Shell’s stock price peaked in late January and has since risen and dropped throughout the year. The graph below displays the stock price the day before the protest as well as six days after. In this case, any press is good press because, like the six protesters, the stock price rose.

Fellow petroleum company, BP continues to receive headlines for its 2010 mistake, the Deepwater Horizon Oil Spill or the BP Oil Spill. Three years later, the damages continue to harm coastlines, people and sea life.

At the time U.S. President, Barack Obama addressed the event as, “The worst environmental disaster America has ever faced…Make no mistake: we will fight this spill with everything we’ve got for as long as it takes. We will make BP pay for the damage their company has caused.”

And indeed, BP has done just that.  As BP explains, they have spent $25bn thus far in clean-up and restoration and owe the U.S. government another $4.5 in fines. They are also facing a $8bn settlement economic claims with numbers continually growing. 

Recently, fraudulent cases against BP have increased. Thus, as the Guardian explains, “BP has set up a fraud hotline and is offering rewards to people who report bogus claims related to the Deepwater Horizon oil spill. The line, with the number, ‘1-855-NO-2-FRAUD’ promises that, ‘tips that lead directly to an indictment…may entitle the reporter to a reward.”

“BP continues to take steps to stamp out fraud and corruption and assure the integrity of the claims process, the company remains committed to the Gulf and to the payment of legitimate claims for real losses,” says a recent BP press release.

Now, how does this impact the company? The graph below displays the past five years of BP’s stock and as you can see, BP reached their lowest stock price in 2010 just after the Deepwater Horizon Spill. The stock has continued to dig itself from its slump but the price appears to be levelling off.

With talk of green energy, companies like Shell and BP may shudder but the truth is these petroleum companies are powerful in spite of negative press and alleged wrong doings.

 

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