Tags: US | Oil | Spill | Stocks

BP Shares Rebound After Broad Selloff

Wednesday, 02 Jun 2010 03:04 PM


Investors on Wednesday cautiously returned to BP PLC and some of its partners in the failed deepwater well that's spewing millions of gallons of crude into the Gulf of Mexico.

Shares of BP, Halliburton Co., Cameron International Corp. and Anadarko Petroleum Corp. all rebounded in afternoon trading following a broad sell-off, including a 15 percent drop in BP stock, on Tuesday. Shares for rig owner Transocean Ltd. continued to slide.

The jump did little to stop what has been a deep plunge in BP's value since the April 20 oil spill, however. The British oil giant is still worth $73 billion less on the open market since the Deepwater Horizon rig exploded. The ruptured well has gushed between 20 million and 43 million gallons of crude into the Gulf, and experts say the cleanup, fines and lawsuits could eventually cost BP tens of billions of dollars.

Halliburton, which was in charge of sealing the well before it ruptured, led the rebound after the oil services company told investors it hasn't lost any work because of its ties to the Gulf oil spill.

Chief Financial Officer Mark McCollum said Hallliburton's contract with BP protects it from lawsuits and damage claims. "We believe we've followed BP's instructions," McCollum said. "You can't develop an argument around gross negligence if you follow their directions."

Tim Probert, Halliburton's global business president said deepwater drilling activity likely will recover in the Gulf in the next year or two. He added that drilling activity in international waters has seen a "modest impact" as countries ask operators to ensure the safety of blowout preventers and other equipment. But so far, there have been no policy changes regarding drilling.

A rise in oil prices and equities markets helped boost stocks across the energy sector despite an announcement from President Barack Obama that he wants to roll back "billions of dollars in tax breaks" for oil companies and use the money for clean energy research.

In afternoon trading, Halliburton rose $2.32, or 11 percent, at $23.47 a share. BP shares added 63 cents at $37.15; Cameron added $1.14, or 3.6 percent, at $33.03 a share; Anadarko gained $1.70, or 4 percent, at $43.80. Transocean lost $2.14, or 4.3 percent, at $47.90.

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