The price then started to slide, but was heading back to breakeven when the latest legal setback in the United States hit the headlines. In early September, BP was declared to have been grossly negligent in its part in the Gulf of Mexico oil spill, raising the bar for possible total penalties.
BP had already set aside $43bn to cover the potential total costs, but the interim ruling means BP could be fined $4,300 per barrel of oil spilled rather than the $1,100 applicable to a mere negligent ruling.
The final amount wont be known for some time as, not surprisingly, the two sides are some way apart in their opinions of the size of the spill, but it looks set to be a lot more than the $3.5bn BP had been expecting.
The share price slumped by 6% on the day to 455p, and though it subsequently rallied a little, its since fallen back to 450p thats a fall of 7% since the start of 2014, against a 2% fall for the FTSE itself.
Not going to win
Its still possible for BP shares to recover again and end the year ahead, but with sentiment the way it is and no further resolution to the latest court decision (which BP is appealing) due in the immediate future, my bet would be on an overall losing year.
So how about investing in BP now? Well, despite the cutback in the immediate aftermath of the disaster, BP is already back to paying strong dividends we have 5.3% and 5.6% forecast for the next two years.
A cut is possible should the ruling continue to go against the company, but I think its unlikely itll be dragging on for years yet, and therell be plenty more income to cover it.
And its surprising how well BP has done over the past ten years. Despite the largest accidental marine oil spill in the history of the petroleum industry, and despite the hardest recession for decades, a 10,000 investment in BP ten years ago would be worth 13,000 today not a great return, but a lot better than the loss that Id wager many people would have guessed at.
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Alan Oscroft has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don’t all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.