BP’s Oil Leak Could Pollute Its Motorsport Sponsorship.
By Charles Oladeji.
Everybody in America and The United Kingdom should be aware of the catastrophe that looms in the Gulf of Mexico, due to an unrelenting oil leak over the past two months. At the centre of this oily mess is a reputable British Company BP (British Petroleum) who, until this very public disaster, had been trying to promote clean energy within the remit of off shore drilling and oil production business.
The potential disaster in the Gulf of Mexico has moved from being just another spill to an ominous threat to Obama’s Presidency. Furthermore, the future pension payouts in the UK are in jeopardy as the extent of BP in the UK economy is revelled to run very deep. It’s suggested that every £1 in 10 from a pension payout depends on the success of BP.
The fallout has spread from the ecological, to the political and economic, with a social dimension to boot, as residents of Louisiana find their way of life about to be changed for many years to come. The White House has made a conscientious decision to apply visible political pressure on BP, while BP shares have fallen sharply over the past week. BP still has bucket loads of money in profit, but that bucket has seen a sizable loss in both political and financial weight. While BP continues to capture about 630000 gallons a day, the wellhead leak which is approximately 5000 feet beneath the water is spilling around hundreds of thousands more into the Gulf.
At present, BP’s reputation will only be fixed by a complete fixing of the leak and payment in compensation to those affected. The latter point means emergence of that dreaded class of opportunistic people so essential to the American way of life, Lawyers.
According to reports in the UK, clean up costs are now in the region of 1.1 billion Pounds Sterling. Within this context of costs, the BP board recently made a decision to suspend its hefty dividend payout to shareholders prompting another fall in share prices by 10%. All this could mean enormous cost to BP, in addition to covering costs of stringent safety regulations bound to be implemented as a result of the leak. It seems highly likely that BP shareholders and Board will consolidate and cut sponsorship funding for motorsports amongst other things.
The flip side of that coin is whether Motorsport Teams, who in the past would have jumped at chance of sponsorship by a big multinational like BP, won’t be a little more restrained in their association with a company that is being damned globally as a big time planet polluter. The most visible benefactor of BP on the international stage is the Ford BP Abu Dhabi Team in the World Rally Championship. In the past BP has been involved with the Dakar Volkswagen Team and Ferrari Racing.