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To: fluorescence
BP likely is going to find itself susceptible to a little situation that another of the big major energy companies found itself in about 30 some years ago.

It seems that the company in a streamlining move radically reduced its engineering and science staff over several years to reduce costs. Well, it streamlined so much that it lacked the capability in-house to accurately keep up with a small thing called proven oil reserves Proven reserves are an asset used as collateral in big time finance deals. We're talking several billion $$$ here. Eventually the banks and regulators figgered this out and called the company on the practice. Between lawsuits and multinational fines, this cost the company about 10-billion $$$ as I recall. In addition, the consent decree required the company to add several hundred petroleum engineers to the staff immediately to support the upstream oil field management, etc. Problem is, there was a world wide shortage of petroleum engineers. Pet. engineers (and chemical engineers) do not grow on trees. Most engineering colleges do not have petroleum engineering and the ones that do generally turn out something like a dozen new petroleum engineers per year. It cost the company a royal mint to restaff their engineering.

Sooo, my fearless prediction is that within 5 years, BP is likely to have some interesting problems unless they radically downsize the petroleum side of the business, which sounds like they plan to do. Downsizing like this though is going to present some issues regarding the value of the asset in that without the significant people expertise to go along with the sale, the value of the asset to a buyer will be lower.

Dollars to donuts this 49yo president of BP is an MBA.

5 posted on 06/09/2020 6:45:55 PM PDT by Hootowl99
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To: Hootowl99

Actually, he is an irish engineer who maybe got an MBA while he was being groomed after he was selected long long ago.


7 posted on 06/09/2020 8:56:25 PM PDT by Sequoyah101 (We are governed by the consent of the governed and we are fools for allowing it.)
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