The Wall Street Journal's Market Watch says today's earning report shows that BP, the British oil giant, is still "struggling to make things right."
BP posted a $1.4 billion loss for the second quarter of the year. The main reason for the loss is that BP took a $4.8 billion writedown — in other words it reassessed some of its assets and decided that they were worth less than the company thought.
The New York Times reports that this was unexpected. They quote Robert W. Dudley, the company's chief executive and the first American on the job:
"According to Mr. Dudley, BP is writing off a combined $2.1 billion on shale gas acreage because of lower natural gas prices, as well as a project called Liberty on the North Slope in Alaska that BP invested in but then recently halted because of environmental and other concerns. The remaining $2.7 billion is a write-down on the value of BP's U.S. refinery system. The company is trying to sell two of its U.S. refineries, including a giant one in Texas City, Texas, and has come to realize from other sales that they are not worth the value it had on its books.
"Mr. Dudley is caught between pressure from investors who want to see an improvement in the stock price, which is still down about 30 percent from the level at the time of the disastrous Gulf of Mexico oil spill in April 2010, and his own determination to make BP a safer, more reliable and ultimately more profitable company. Unfortunately, such a transformation requires time and weighs on performance in the short term as oil fields are shut down for extensive repair work."
The AP notes that BP also added $847 million for the Gulf of Mexico oil spill disaster clean up, which now totals $38 billion.
But as Market Watch puts it, this is a struggle between profitability and safety and shareholders seem to be getting antsy.
"BP's U.S.-listed shares fell 4% Tuesday to $40.25 in New York. They are still a far cry from the $49.50 high hit in early 2011, when investors believed the company was over the worst of the spill and, under new management, would reach for the stars.
"Having failed ever since to break above $50 a share, today's downbeat quarterly report gave impatient investors a good excuse to go elsewhere while Dudley continues the tedious task of turning things around at BP."