Analysts See Negative Impact Of BTC, Georgia On BP Earnings
Friday August 8th, 2008 / 16h24
By Benoit Faucon Of DOW JONES NEWSWIRES LONDON -(Dow Jones)- A prolonged shutdown at a BP PLC (BP)-operated trans-Causasian pipeline, in addition to a conflict in Georgia, is raising concerns among some analysts that it could eat significantly into the company's earnings. The one million barrels-a-day Baku-Tbilisi-Ceyhan oil pipeline Wednesday was shut down after a fire on the Turkish part of the route and the local pipelines company said it may be out of order for the next two to five weeks. So far the markets have shrugged off the problem with the stock up 1.5% to 520 pence since the shutdown was announced. But some analysts are starting to worry it will impact BP's bottom line. The negative impact on earnings "will be significant...there is no doubt about it," said Fadel Gheit, an analyst at U.S. broker Oppenheimer & Co., who estimates it could cut quarterly earnings by 3% to 5%. "The market is likely to react to growing (information) on BTC more than it has done up to now," said Peter Hutton, an analyst at broker NBC, in a research note. The shutdown is set to hurt BP because it is the 30.1% owner and operator of the route and receives tariff fees from it. But most importantly, BTC is also the main route for Azerbaijani fields operated by the British oil giant, and routes to divert their production are limited. Company Web site: http://www.bp.com -By Benoit Faucon, Dow Jones Newswires; +44-20-7842-9266; benoit.faucon@dowjones.com Click here to go to Dow Jones NewsPlus, a web front page of today's most important business and market news, analysis and commentary: http://www.djnewsplus.com/al?rnd=NId47M3vsqdNbn%2FahaPRAg%3D%3D. You can use this link on the day this article is published and the following day.
