Investors suspend intentions to buy BP shares

Nordic bank Nordea has confirmed that it has withdrawn around £8.3m worth of BP (LON:BP) stock because the British oil giant has failed to communicate enough information about the oil spill in the Gulf of Mexico. The bank said that it would halt further investment in the under-fire group until further notice.

Rob Hull
shareprices.com - Tuesday, June 08, 2010

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Nordea has pulled €10m worth of stock out of BP

BP has seen its share price plummet over 200p since the Deepwater Horizon spill began on April 20 –a decline of more than 35 per cent.

The oil producer has been battling to contain the leaking oil from the deepwater well since the rig explosion over a month ago with the latest attempt to cap the leaking oil being the only successful campaign, which is still only preventing half of the leaking oil from gushing into the sea.

And with the conquest to plug the leak ongoing, BP and CEO Tony Hayward has come under close scrutiny and heavy criticism from the U.S. Government and President Obama himself.

The whole ordeal has damaged BP’s brand image both inside and outside of the U.S. and investors have been on a BP shares selling frenzy to wash their hands of the troubled firm.

BP stock is again at the head of the FTSE 100 fallers for today’s session, shedding another 3.8 per cent to drop to a lowly 414p.

Nordea said its investment committee made a decision on Friday to sell its holdings in BP because the group hadn’t disclosed enough information about the oil spill which has become the worst environmental disaster in U.S history.

The bank said: “The environmental catastrophe in the Mexican Gulf is an extraordinary situation given the size of the spill, weak response from BP, criminal investigation towards the company, as well as anticipated risk for other accidents”.

Nordea has sold BP shares in 20 of its Nordic region and SRI-related funds and said it will suspend further investment in the oil giants until further notice.

The Scandinavian bank also accused BP of failing to comply with its own safety and environmental rules and has launched a review into its investments in the group to ‘indentify systematic safety and environmental risks associated with deep water drilling operations’.

The lack of confidence in safe investment in BP has also spread to competing oil and gas producers with Royal Dutch Shell (LON:RDSA) and BG Group (LON:BG) stocks also in decline in recent sessions - both groups are over one per cent down today.

 

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