Shares of BP have fallen by nearly 35% in value since the start of the Gulf of Mexico oil spill, wiping about 43 billion ($NZ92.2 billion) off the value of the company. Business editor Dene Mackenzie looks at some possible scenarios for the company.
Oil continues to leak into the Gulf of Mexico, with latest updates putting the cost to BP about $US1 billion ($NZ1.5 billion) so far, as the energy giant tries to stop the flow of oil and clean up the damage.
The effort to date has involved 22,000 people and 1100 vessels.
BP says the flow of oil has been reduced, but the failure of the "top kill" procedure brings further delays in stopping the leak.
Craigs Investment Partners broker Chris Timms said BP was struggling to slow the flow of oil from the well.
The damaged riser was on the seabed, in water 1.5km deep, and the oil reservoir was another 4km below the seabed.
"At this depth, high pressures and low temperatures are making work very difficult."
BP faced environmental and financial impacts from the spill, he said.
Oil slicks had formed on the surface of the Gulf of Mexico and large plumes of oil, some of which were believed to be 15km long by 5km wide, were moving underwater.
Some oil had reached the shoreline in Louisiana and more was expected.
Residents feared that bad weather could spread the oil and push it into the fragile wetlands and rivers.
"Concern is also growing that ocean currents could carry the oil around Florida, into the Atlantic Ocean and up the east coast of the United States."
Total costs to stop the rupture, clean up the environment and compensate affected parties were still unknown, Mr Timms said.
The costs were likely to include up to $US33 million a day to stop the flow and contain the spill.
BP has committed $US500 million to study the environmental impacts over the next 10 years and it could be liable for lost income from the local fishing, oyster, shrimp and tourism industries.
Costs to defend and settle likely future investigations and litigation were likely to be a drain on management resources and a distraction from operational management for several years.
"There is likely long-term damage to BP's reputation and credibility.
BP was seen as a world leader in deepwater exploration and drilling and was the biggest deepwater operator in the Gulf of Mexico.
The US accounts for about 40% of BP's business.
BP might find it more difficult to gain access to new offshore projects in the future."
Some commentators suggested that BP's share of the total direct costs could add up to $US10 billion, Mr Timms said.
BP was self insured and would have to bear the cost itself.
In addition to the direct costs, BP was likely to face a variety of indirect financial consequences from the damage to the company's reputation and increased operating costs.
It was likely to increase its expenditure to improve safety and reduce risks in coming years.
Aside from the oil spill, BP's operations had been performing well recently and the company reported good results for the three months to March, he said.
"The shares offer an attractive dividend yield.
However, we are concerned about the increased risks and the possible long-term consequences of the oil spill for the company," Mr Timms said.
BP shares have fallen from a peak of 6.55 in April before the leak to a low of 4.11 this past week.
They closed yesterday at 4.29.
Market capitalisation has dropped from 124 billion to 81 billion in the same period.
Forsyth Barr broker Peter Young said investors were voting with their feet.
"The current share price drop suggests they are losing confidence in BP's ability to deal with this situation and they are factoring in worst case estimates for costs and underlying business effects.
Clearly, shareholders do not wish to be associated with the spill."
So far, BP had taken total responsibility for the spill, which seemed extraordinary but made sense when it came to the small print regarding who was liable for what, he said.
The situation was far from simple.
Also involved in the Deepwater Horizon well was Anadarko Petroleum (25% stake) which had made it clear that it had insurance coverage of about $US177.5 million on the well.
BP would be making sure Anadarko took its fair share of the blame.
Lloyds of London, which insured Anadarko, was already "desperately" looking for some sort of ring fence, which it had not got, Mr Young said.
Mitsui and Co had a 10% share and it could be that those three shared the costs.
It was difficult to say how watertight the various indemnity agreements were with rig owner Transocean but, so far, in private lawsuits filed from Texas to Florida, London-based BP, as owner of the well, and Transocean were named as defendants, he said.
"I don't think BP would be so stupid as to leave themselves totally open to all the costs.
"I'm pretty sure this is a lot of hot air and judging by other cases I've seen in the US, by the time it actually comes round to court and awards, the lawyers have found a way round practically every contract - regardless of how watertight.
"BP will also have years to pay this off given that the legal system in the US is so slow.
Every claim is counterclaimed as standard practice out there," Mr Young said.
Also sued in more than 100 complaints were Cameron International and Halliburton Energy Services, which provided blowout prevention equipment and drilling services respectively.
Either of those companies might be included in the US Government's efforts to recoup money spent on the clean-up.
Although primarily responsible as the leaseholder, BP was sure to try to pass on liability by suing the other firms.
That was going to be BP's major route for passing on the costs, Mr Young said.
It would be ongoing for years, but BP would have plenty of ammunition to tear apart any indemnity through break of contract, safety failures, misinformation and equipment failure based on lack of maintenance.
Speculation that BP will become a takeover target is being dismissed by analysts polled internationally by Reuters.
Exxon Mobil, Royal Dutch Shell and Chevron are the only fully publicly traded oil companies larger than BP and deemed financially strong enough to buy it.
The US Government blocked the takeover of Asia-focused US oil company Unocal by China's CNOOC for strategic reasons, so most analysts doubt it would allow BP to be taken over by a state-backed oil company.
Antitrust issues could arise over BP's refineries if it were acquired by Exxon, Shell or Chevron.
This could force the sale of refineries, but in the current depressed refining environment, that would be difficult.
The biggest barriers for a proposed takeover were the unknown liabilities that arose from the spill.
Similarly, selling off BP piecemeal might not attract buyers because the individual parts would still be liable for the spill.
US legislators might also block any deal seen to strengthen anyone in the oil industry.
