By Ray Fleming

BRITISH Petroleum is the second largest oil company in the world. It employs 80'000 people, operates 22'400 petrol stations and generated 239bn dollars revenue last year. Yet this week's fifth failure to stop the oil from gushing into the Gulf of Mexico from one mile down has encouraged talk that BP may itself be in danger of slipping beneath the surface of fiscal survival. The most talked about outcome is a take-over or merger and the name most frequently mentioned is Shell. In the money markets BP has lost one-third of its value, about 44bn pounds, since the blow-out on the Deepwater Horizon rig on 20 April. Even if a way of stopping the oil is found quickly BP will still face huge costs in restoring the damaged environment and in compensation; furthermore its reputation has been seriously affected, perhaps permanently, by the fact that its current problem follows on safety failures in Alaska and Texas in recent years.

Oil companies are resilient, as ExonMobil showed after one of its tankers hit a reef off Alaska in 1989 and caused what was then America's worst oil-spill. But the current BP spill has already far exceeded ExxonMobil's disaster and worse may yet be to come. Its position is further weakened by the hostility of the US government and probably by much of America's oil industry because of the set-back this event will cause in the operational freedom it has enjoyed for so long.