Baker BP report not as bad as feared – Citigroup

17 January 2007 14:10  [Source: ICIS news]

TORONTO (ICIS news)--The Baker report on BP's 2005 Texas refining accident was not as negative as some had expected, and it is not likely to lead to any management departures at the company, analysts at Citigroup said on Wednesday.

 

The analysts said what is important is that the report did not apportion blame, and that it indicated that BP did not purposefully withhold safety spending at its US refineries.

 

BP has already taken a number of measures to comply with the report’s recommendations, the analysts added.

 

From a financial perspective, these actions involve higher capital expenditure to improve US refinery reliability and integrity. The analysts expect that expenditure to rise from $1.2bn (€920m) in 2005 to $1.7bn between 2007 and 2010.

 

“While there is still a financial impact from reduced Texas City operations, sentiment may have bottomed out,” they added.

 

But Citigroup also said that a full “harder-hitting” report by the US Chemical Safety and Hazard Invesitgation Board (CSB) is still to come out.

 

($1 = €0.77)

By: Stefan Baumgarten
+1 713 525 2653

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