The plummeting of BP’s share price following the Deepwater Horizon oil spill has forced down the value of the council’s stock market investments by almost £4 million in recent weeks.
Between the council’s oil reserves and its pension fund, a total of more than £8 million was held in the form of BP shares at the end of the last financial year. But since the environmental catastrophe in the Gulf of Mexico, BP shares have fallen from well over £6 to around £3.40 this week.
The pension fund’s holdings in BP have dropped from £5.9 million at the start of April to only £3.2 million at the start of this week. The £2.5 million-worth of BP shares held as part of the council’s reserves are now valued at only £1.4 million, meaning the paper loss to the SIC stands at £3.8 million.
SIC accountant Colin Bain stressed that it was only a “snapshot in time” of the BP shares held by the council and its pension fund. “The time period covered is very short and it will most likely be the case that both the council and the pension fund have held BP shares for many years. The initial purchase price of BP shares is not considered in this information and may well have been below their current level.”