Excerpt from our One Page Annotated Wall Street Journal Summary (receive it by email every morning by signing up here):
Congress to Begin Exploration Of BP's Alaska Oil Problems
Summary: Last month BP PLC (NYSE:BP) partially shuttered its Alaska oil field after discovering corroded pipes. Today, Congress' House Energy and Commerce Committee will hear testimony from experts and BP officials. This is the most recent in an embarrassing series of regulatory, criminal and civil probes at BP. In March 2005, an explosion at BP's refinery in Texas killed 15 workers, resulting in heavy fines for safety violations. And the Commodity Futures Trading Commission [CFTC] alleges the company manipulated the U.S. propane market in early 2004, a charge the company denies. Investigators are also examining BP's crude-oil and unleaded gasoline trading. The company is at risk of losing its hard-earned reputation as a bastion of environmental and corporate responsibility.
Comment on related stocks/ETFs:BP of course denies that it ever rigged propane prices or engaged in illegal trading schemes. "Market manipulation did not occur," said spokesman Ronnie Chappell. But BP's own investigation resulted in the dismissal of three employees for “failure to follow its trading policies,” although the company declined to provide details. David Phillips asks, "Do any of our readers buy into Ronnie Chappell's transparent insincerity?" The company made $2.97 billion in profit last year from its trading operations—about 13 percent of its 2005 net income of $22.34 billion. But Roger Nusbaum has not been put-off by the scandalous negativity surrounding this stock. "In the few years I have been involved with the name there have been several instances where the headlines have been scary but with no lasting impact."