Bob Dudley replaced predecessor Tony Hayward in October 2010, six months after the disaster and with the financial fallout looking as uncontainable as the oil. To pay the bill, he got shot of more than $70 billion of assets, including the group’s stake in fractious Russian joint-venture TNK-BP: the outfit that once forced Mr Dudley into hiding, triggering all the poison talk.
Growth looked off the agenda. So it says something for Mr Dudley’s patient rebuilding work that BP is expanding again. The exploration and production wing has just had its “strongest” three months since the third quarter of 2014, with BP pumping 3.7 million barrels a day — closing in on the pre-Macondo four million. The first new project into production this year was the Atoll gasfield in Eygpt. But BP also took final investment decisions on four others: two in the North Sea and one each in Oman and India.
True, the new BP growth story has its risks. About 30 per cent of production and 40 per cent of reserves come from its near-20 per cent stake in Russia’s state-owned oil group Rosneft: the holding Mr Dudley swapped for the TNK-BP stake plus cash. But its cashflows help to fund the $7.5 billion-a-year dividend: the one stuck at ten cents a quarter for three and a half years. As Mr Gilvary noted, at today’s oil price BP sees “net debt naturally start to decline” — enough for “a conversation with the board around the dividend” this year. The shares already yield 5.3 per cent. Notch up the payout and there may be more proof of Mr Dudley’s turnaround: shares back at pre-Macondo levels.
Grocers need deal
Now we know why Sainsbury’s and Asda are so keen to get together: those £500 million synergies will make up for the disappearing customers. The latest Kantar data has just arrived — and it doesn’t make the prettiest of reading for either retailer.
Now we know why Sainsbury’s and Asda are so keen to get together: those £500 million synergies will make up for the disappearing customers. The latest Kantar data has just arrived — and it doesn’t make the prettiest of reading for either retailer.
In the past 12 weeks, Sainsbury’s has lost another 0.3 percentage points of market share, now down to 15.9 per cent, while Asda was down 0.1 of a point to 15.5 per cent. At this rate, by the time the Competition and Markets Authority has finished scrutinising the deal (probably some time next decade, on past form), the combo might not even be Britain’s biggest supermarket group.
Tesco maintained its share at 27.6 per cent, outperforming the market with sales up 2.1 per cent. Contrast a mere 0.2 per cent sales growth at Sainsbury’s, while Asda’s were up 1.4 per cent. The best of the Big Four was Morrisons, up 2.2 per cent and holding its share at 10.5 per cent.
True, no one should read too much into 12 weeks’ Kantar data, based on the grocery buys of 30,000 households. But, Bernstein analyst Bruno Monteyne noted, Sainsbury’s till roll growth has ranked “last out of the Big Four for five months in a row”. As he put it: “The timing seems right for Sainsbury’s and Asda to combine forces.”
That’s a bit unfair on a pair that avoided the big screw-ups that have forced radical surgery on Tesco and Morrisons. But Sainsbury’s boss Mike Coupe cannot afford to lose sight of the day job while he gets embroiled in CMA inquiries. There’s a risk his deal won’t happen.
Rate rise delayed?
More snow? No, as it happens. The manufacturing PMI hit a 17-month low in April without any help from the Beast from the East. Still, the reading still came in at 53.9, where anything above 50 indicates growth — and beat the long-term average of 51.7. Our exports were also up against a stronger pound and a weaker eurozone. Besides, manufacturing is only 10 per cent of UK GDP. Tomorrow’s services data is what really counts.
More snow? No, as it happens. The manufacturing PMI hit a 17-month low in April without any help from the Beast from the East. Still, the reading still came in at 53.9, where anything above 50 indicates growth — and beat the long-term average of 51.7. Our exports were also up against a stronger pound and a weaker eurozone. Besides, manufacturing is only 10 per cent of UK GDP. Tomorrow’s services data is what really counts.
More of a worry was March’s sharp drop in consumer credit — up by just £300 million, below what ING sees as “the usual growth of between £1.4 billion to £1.8 billion”. As it said, it could be a “blip”. But probably another reason after the mere 0.1 per cent rise in first-quarter GDP for the Bank of England to duck a rates rise this month. Still, there’s no data yet to suggest 0.5 per cent is the max we can handle.
Nuclear fears
Hitachi is so keen to build a new nuke in Anglesey that its boss is meeting Theresa May tomorrow. But, if the Nikkei Asian Review is right, it’s hard not to have a few worries about the £10 billion-plus project. The paper notes that “the company and the Japanese government see it as too risky for Japanese interests to retain a majority shareholding and hope that British interests will acquire a controlling stake”. How reassuring.
Hitachi is so keen to build a new nuke in Anglesey that its boss is meeting Theresa May tomorrow. But, if the Nikkei Asian Review is right, it’s hard not to have a few worries about the £10 billion-plus project. The paper notes that “the company and the Japanese government see it as too risky for Japanese interests to retain a majority shareholding and hope that British interests will acquire a controlling stake”. How reassuring.
