BP Has Time, and Investors, on Its Side
ByFew institutions understand the time value of money as well as the world’s major oil companies. Spending billions of dollars digging holes in the ground in the hope of finding enough black gold to make a profit in the following decades means taking a long view of what a dollar is worth now versus what its value might be years hence. And that, in turn, helps explain why BP shares are rising today even after the company reported its worst profit in at least a decade.
Earlier this month, BP agreed to pay a record $18.7 billion to settle U.S. state and federal claims for the damage done by its Deepwater Horizon platform, the worst offshore oil spill in U.S. history. The company has set aside more than $54 billion against its liabilities, including a $10.8 billion charge in second-quarter earnings that helped reduce profit to $1.3 billion, a 64 percent drop from a year earlier…
BP Has Time, and Investors, on Its Side
