Skip to main content

Oil Spill Stains BP, Transocean Shares

Shares of oil giant BP and Transocean suffer their biggest losses yet on Thursday as a result of the oil spill in the Gulf of Mexico -- as the U.S. government indicates that the situation is getting worse.

(BP, Transocean story, updated for White House comments, Thursday trading)



) -- On a day when the markets and the energy sector were up -- even on weaker than expected earnings from

Exxon Mobile

(XOM) - Get Exxon Mobil Corporation Report

-- shares of


(BP) - Get BP Plc Report



(RIG) - Get Transocean Ltd. Report

suffered their worst share losses this week in relation to the worsening oil spill disaster in the Gulf of Mexico.

Shares of both BP and Transocean had their biggest losses of the week on Thursday, as President Obama publicly spoke on the oil spill for the first time, and marshalled wide-ranging federal resources to the clean up effort, and government investigation of the oil spill's cause.

One estimate indicated that the oil spill in the Gulf of Mexico will exceed the volume dumped by the Exxon Valdez into Alaska's Prince William Sound in 1989 by the third week of June.

President Obama declaring the Gulf of Mexico oil spill an event of "national significance." Louisiana Governor Bobby Jindal also declared a state of emergency related to the oil spill on Thursday.

Scroll to Continue

TheStreet Recommends

In the case of BP, the Thursday share loss was over 8%, or equal to $4.78 per share.

For Transocean, the per share loss was just under 7.5%, or $6.32 on Thursday.

Thursday trading volume in Transocean shares was huge, with more than 32 million shares traded, versus an average daily volume of under 7 million shares.

Previous to Thursday, the largest one-day losses suffered by BP and Transocean shares this week were in the range of $2 per share.

Most offshore drilling stocks -- which had traded up on the Obama administration announcement that it would allow offshore drilling for the first time in more than three decades -- traded down on Thursday, as the federal government faced renewed pressure over its endorsement of offshore drilling in light of the oil spill.

"Obviously, what's occurring now will also be taken into consideration as the administration looks to how to advance that plan and what makes sense and what might need to be adjusted," said Carol Browner, Obama's adviser for energy and climate change.

President Obama said that the secretaries of the Department of the Interior and Department of Homeland Security, as well as the head of the Environmental Protection Agency, have been tapped to manage the oil spill disaster clean up, and investigate its causes.

In all, 16 federal agencies have been called to action, and the declaration by President Obama that the Gulf of Mexico oil spill is of "national significance" opens the spigot for federal funding, Homeland Security Secretary Janet Napolitano said at a White House briefing on Thursday.

Late on Wednesday

, the oil spill situation in the Gulf of Mexico worsened, when the U.S. government said that actual rate of the oil spill was five times greater than BP's original estimate.

BP's efforts have so far proved ineffective at stopping the oil spill's growth and the rate of the underwater leak from the BP well located 5,000 feet beneath the Gulf of Mexico's surface.

The Obama administration asked BP to also consult with the Department of Defense, but it is not clear yet if the use of military equipment would be helpful in efforts to control the oil spill.

The U.S. Coast Guard had already begun a controlled burn on Wednesday to try to limit the approach of the oil spill to sensitive U.S. coastline areas.

BP CEO Tony Hayward was in Louisiana watching over the creation of a dome that BP hopes will allow it to contain the oil spill, but that effort could take weeks before it is ready, and the U.S. government is now estimating that the oil spill could reach U.S. shoreline by Friday evening.

BP has indicated that efforts to contain the Gulf of Mexico oil spill is costing the company $6 million per day.

President Obama made it clear in his remarks that while the federal government will pursue all means to contain the oil spill, it remains BP's responsibility to pay for the clean up effort.

Department of the Interior Secretary Ken Salazar called the CEOs of the offshore drilling companies, as well as technical experts, to a meeting in Washington D.C. late on Thursday.

-- Reported by Eric Rosenbaum in New York.


>>Oil Spill in Pictures: Gulf of Mexico Impact

Follow on


and become a fan on


Copyright 2009 Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.