BP (BP) CEO Bob Dudley must not sleep very well at night.
Shares of BP stock still haven’t recovered to their pre-Deepwater Horizon disaster levels. One of the worst oil spills in history, the explosion and resulting catastrophe caused more than 4.9 million barrels of crude oil to spill into the Gulf of Mexico back in 2010. Not to mention, eleven workers died on board the rig.
Overall, the issue has cost BP billions in fines, legal fees and settlements with victims. It has also resulted in a virtual garage sale of billions of dollars of prime energy assets.
And just when things seem to be getting better for BP and its position, it goes and makes another bone-headed environmental mistake, spilling into Lake Michigan.
While its recent spill is only a fraction of the Deepwater Horizon’s numbers, it still puts more pressure on BP stock shares and management going forward. And as for investors, you have to wonder if events like this will continue to plague shares for the foreseeable future.
All in all, BP stock might not be your best Big Oil buy.
Lake Michigan Refinery Spill
BP’s latest environmental woes stem from a spill at its Whiting refinery on Lake Michigan — only about 20 miles away from downtown Chicago. The facility is designed to process heavy Canadian crude oil produced in Alberta’s oil sands region. According to BP, a malfunction happened where the tar sands crude oil somehow got into a water containment and cooling unit and was flushed out into the lake.
According to estimates made by BP, roughly 39 barrels of oil — about 1,640 gallons — were discharged into the lake.
Again, that amount of oil isn’t anywhere as big as the Deepwater Horizon spill, and the EPA and Coast Guard have pretty much cleaned up the spill. However, this small incident could be just as much of a headache for the energy firm and BP stock investors.