They say it takes more than six nautical miles to turn around a fully laden oil tanker that’s operating at full tilt, far out at sea.
That’s an awfully large turning circle. And a feat that’s requires some herculean effort.
So spare a thought for BP, who, having changed direction and altered course, now appear to be coming full circle, having broken the tiller.
Let’s rewind a little.
Back in April, following a rough twelve months and having been put through the grinder by both investors and the general public, BP raised the white flag and put its US wind energy business up for sale.
The announcement sent shock waves through the industry, as one of the largest investors and operators within the sector abruptly pulled the plug.
In an instant, that meant that the 16 operational wind farms located in nine different US states were up for grabs, together with an estimated 2GW pipeline under development and at various stages of planning and consent.
And since BP had established a pretty impressive reputation for unstinting quality and on site operational excellence, from the outset there was never any doubt about the performance and power potential of the parks.
However, four months on – and following some pretty bold statements from senior management that effectively signalled a renewable retreat – it’s all change. Again.
Last week the company issued a statement effectively confirming that it hadn’t received any offers that it was prepared to accept and that it was taking the wind energy portfolio back off the market.
According to the business, offers were received but they simply weren’t competitive enough – suggesting that there was a mismatch between what the firm thought the portfolio was worth, versus what others were prepared to pay.
That’s a dilemma that’s familiar to many would-be property developers and homeowners the world over, albeit on a far smaller scale.
And curiously enough, the lessons remain broadly the same.
For, while valuations and best estimates always serve as a guide, until cash is exchanged for goods, the figure is only ever that. A guide. A best estimate. Or put another way – just one side of the negotiating table’s opinion and view.
Now all this is to say that best estimates don’t always have to be marked down, Since valuations and figures are just as likely to rise as well as fall.
That’s something that the historic automotive market has been reminded of recently, following the $29.65m price paid for Fangio’s F1 race-winning Mercedes – a record feat that makes it the most expensive car ever sold at auction.
Small consolation to BP of course, particularly when it’s found itself in such a bind. And is seemingly looking for a quick buck.
Nevertheless, there’s a lesson here – and it key to it is timing. BP currently operates a profitable and well-maintained revenue-generating asset.
No one is really in any doubt about BP’s long-term desire to sell. However, to command a premium price it needs to switch gears and re-shuffle the pack.
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