BP fails to convince investors on strategy

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British Petroleum (BP) Chief Executive Bob Dudley’s promise of strong long-term growth failed to convince investors concerned about the company’s post oil-spill strategy. A year after BP, Europe’s second-largest oil company by market capitalization, staunched the massive leak at its Gulf of Mexico well, investors say Dudley has still not set the company on the road to recovery. On Tuesday he sought to address that concern, saying deals to secure new reserves this year would help drive performance in 2012 and 2013. But some analysts were unimpressed. “Other companies have clearly re-defined their strategies over the last 12 to 24 months.
ExxonMobil continues to build its shale gas business in the U.S. and Shell is focused on mega gas projects. But what is BP doing?” Dougie Youngson, oil analyst at Arbuthnot, said in an email to clients. BP shares were down 2.6 percent at 0920 GMT, the second-biggest faller on the FTSE 100 index of blue-chip stocks.
The STOXX Europe 600 Oil and Gas index was down 0.8 percent. Investors are frustrated at the share price which has failed to recover materially in the past nine months despite some progress in oil spill lawsuits and indications the final cost to the company will be less than many had feared. Dudley told shareholders: “We are committed to seeing the true value of the business more strongly reflected in our share price.” Some analysts, bankers and investors are beginning to ask whether the best way for BP to address its valuation discount is to break itself up. U.S. rivals ConocoPhillips, Marathon Oil and Murphy Oil have followed strategies of spinning off their oil refining and fuel retail units.