This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Analyst Sees Smaller BP Under Dudley

Stocks in this article: BP RIG SHI APA

New York ( TheStreet) -- With embattled BP (BP) CEO Tony Hayward seemingly on his way out, investors voted their preference by sending the stock nearly 5% higher in Monday's session.

The latest reports are that an announcement that Hayward - the man at the top when the catastrophic oil spill occurred in the Gulf of Mexico on April 20 -- could come as soon as tomorrow. Hayward might end up staying in the post until October, the reports say, and he could then remain on the company's board until the end of the year.

Bob Dudley, a managing director with responsibility for oversight of the Americas and Asia, is expected to be the company's next CEO. BP is slated to report its financial results on Tuesday, adding to the likelihood of a major announcement.

Oppenheimer & Co. Inc. analyst Fadel Gheit expects that in the future BP will be a much smaller company, spending much more cash on operations and precautions. He believes that the board should wait for the results of the government's investigation before making any executive moves, but between political and shareholder pressure Hayward's fate as CEO could be sealed.

"If BP comes out of the investigations as not guilty it will be for nothing. It is what it is though, and a change will be positive," said Gheit.

Gheit said BP could wind up paying between $30 billion and $60 billion to clean up the oil spill. The high figure represents a scenario where BP is found guilty in the federal probe, but its partner Transocean Ltd. (RIG) ends up absolved. The clean-up cost is likely to be spread out over 5 years, Gheit explained.

"It will hurt BP financially, but not destroy it," he said. "So far they have sold 2% of their assets for $7 billion. They could sell $10-12 billion of assets if they need to."

Assets in Argentina, North Sea and Vietnam would likely go on the block, according to Gheit. Each asset could bring in $2-3 billion.

China National Offshore Oil Corporation (CNOOC) is believed to be interested in the Argentina assets. There is also speculation that CNOOC, PetroVietnam and Sinopec (SHI) all have an eye on BP's $1.3 billion Nam Con Son pipeline assets in Vietnam.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs