BP credit rating downgraded
The fallout from the Gulf of Mexico oil spill continues to build for BP with news of a further downgrade of the company's credit rating. This is the second downgrade this week and comes after chief executive Tony Hayward was forced to sit through a seven hour mauling by the U.S. Congress. So is this the bottom of the market for BP?
The truth is that nobody knows how bad the oil spill could get it before it this fully resolved and nobody knows the eventual cost which BP could be forced to cover. There are suggestions in the marketplace that the total cost of compensation and the clean-up process could top £100 billion although in the current uncertainty it is very easy to throw about these excessive figures. The immediate problem for BP is the very fact that the oil spill is still ongoing and the headlines around the world continue to cause uncertainty and concern within investment markets.
However, when you also take into account that many people were disappointed with Tony Hayward's performance in front of Congress this is turning into something of a nightmare scenario for the company. Tony Hayward's future with the company will certainly be the focus of attention after the oil spill issue has been resolved with many believing he will soon end his relationship with BP.
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