BP To Retain Its Head Quarter In London Despite Brexit

Oil giant BP plc (LON:BP) (NYSE:BP) announced its decision to maintain its headquarters in London regardless of the U.K.’s vote to exit the European Union (EU) or Brexit. UK’s Prime Minister David Cameron announced his resignation on the same day.

The supermajor mentioned that though “uncertainty is never helpful for a business” it respects “the decision taken by the British electorate in the EU referendum.” The company added that it believes that it is very early to ascertain the full consequences of this decision.

However, BP does not expect this decision to have a substantial impact on its business or investments in the U.K. and continental Europe. The company is also optimistic that Brexit will not have a notable impact on the location of its headquarters or staff.

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BP has decided to deal with both the U.K. government and the EU on areas of common interest until a clearer view with respect to the process for negotiations around the nation’s future relationship with the EU emerges.

Fellow supermajor, Royal Dutch Shell (LON:RDSa) (RDS.A), which has a large presence in London mentioned that it would continue to work with the U.K. government and EU institutions subsequent to the decision by the electorate to quit the EU.

Per analysts, the biggest concern now is that Brexit's potential economic impact may worsen the already challenged environment created by lower oil prices. Other concerns expressed by analysts include the uncertainty created for the North Sea operators, mainly regarding the need to source talent for projects in and around the EU.

Moreover, the repercussions of the legal frameworks, which is not expected to change immediately, if there are any changes at all. Therefore, there is an immediate need for a clear leadership.

It is important for the government and industry to work together in the coming weeks to overcome the challenges brought forward by this decision.

BP carries a Zacks Rank #2 (Buy). Some better-ranked players from the energy sector are Boardwalk Pipeline Partners, LP (NYSE:BWP) , FutureFuel Corp. (NYSE:FF) and ReneSola Ltd. (NYSE:SOL) . Each of these stocks sports a Zacks Rank #1 (Strong Buy).