Market report: Tuesday close
SHARES in BP slipped 12½p to 593p today after it emerged that a Texas judge has ordered chief executive Lord Browne to give evidence in a case related to last year's fatal accident at the company's Texas City refinery.
BP, whose global refining chief John Manzoni has also been told to give a deposition, has admitted that 'management system failures' contributed to the catastrophe, in which 15 died and 170 were injured.
But the British oil major says Browne and Manzoni should not have to testify because neither had special knowledge of the incident or the refinery.
It is the latest chapter in a damaging series of events for BP in the US that has been partly behind a 15% fall in the share price since 21 April, when it hit a high for the year of 712p. Last month, the company temporarily shut down the key Prudhoe Bay field in Alaska after tests revealed worse-than-expected corrosion in pipelines.
About 200,000 barrels per day of production has been restored but half the field's 400,000 bpd capacity is expected to remain offline for months while BP does repairs.
BP had carried out pipeline tests on government orders after a spill of 4,500 barrels of oil in March. It has been summoned before the US Congress next week over the Alaskan problems. It is also facing legal action by a New York law firm specialising in shareholder litigation, which claims BP knew about the corrosion but did not take appropriate action.
On top of that, the company is accused of manipulating the US propane market in 2004, and federal officials are understood to be investigating claims it may have manipulated the crude-oil market in 2003 and 2004 and the unleaded petrol market in 2002.
However, the BP share-price fall was against the grain. Buoyed by a 68-point rise on the Dow yesterday and by a healthy set of interim figures from Chilean copper producer Antofagasta, up 9p at 442p, the FTSE 100 rose 9.7 points to 5888.3.
Unilever advanced 6p to 1248p after the market warmed to news that it is selling most of its European frozen foods business to private-equity group Permira for €1.72bn (£1.17bn).
Oriel Securities maintained its add recommendation arguing that the deal leaves Unilever focused on business segments and regions where it has a greater competitive edge.
Shares in Signet slid 9p to 106¼p after Apax Partners and Kohlberg Kravis Roberts shelved plans to buy the jewellery group. Early this month, the two private-equity firms said they were considering a bid but now they have 'no current intention' of approaching the firm.
Stagecoach advanced 1¼p to 118p despite a strike at the company's South West Trains division, which hit many of London's busiest commuter lines. Services are expected to resume tomorrow, but more strikes are planned for 8 and 11 September.
International distribution and outsourcing group Bunzl jumped 20½p to 664p after announcing robust interim figures. First-half pre-tax profits swelled 9% to £88.1m and the company is upbeat about its prospects. Citigroup and Merrill Lynch reiterated their buy recommendations on the shares, with targets of 680p and 690p respectively.
Irish construction company CRH was up 69 cents to €26.47. Pre-tax profit in the first half was €526m, up by 37% on the year-ago total of €383m. Despite slower economic growth in the US, the company has told shareholders they can expect 'good profit growth' in the second half.
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