“There are seven FTSE 100 companies in our list of underperformers, and the biggest one of the lot is BP,” he said. “The energy industry is in crisis, and it is not lost on us that once the oil started to drop it would make life more testing for them.”
Despite BP’s share price having plummeted 48% since April 2010 – the Deepwater Horizon crisis began 20 April – and holding a steady downward trajectory for the past six months, Dobell is confident that past issues have been ironed out.
“BP has paid off the costs from the [Deepwater Horizon] oil spill, which has been very expensive – they have disposed of £40bn worth of assets to help pay the bill and have £25bn in debt,” he expanded.
“But this is a strong business – they have 17.5bn barrels of oil in reserves, and 3.2bn barrels in production every day.
“BP has responded heroically [to the spill]. What people fail to understand is that the culture has changed and BP has stretched every sinew in its body. It has enforced capital discipline that has not been seen in its industry for many years. There is good cashflow in a business which has been soiled by the UK equity market looking for its next headline.”
