Companies Benefitting From The Oil Spill

The Deepwater Horizon oil spill has impacted BP (NYSE:BP) stock significantly with a more than 50% drop in its price since the beginning of the crisis, from a high of $59 to a low of $27 and a current price of just over $29. While the jury is still out about the long-term effects this spill may have on BP, several companies stand to benefit.

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Competitors
BP's oil conglomerate peers are poised to benefit from this crisis, despite the fact that their respective stock prices have also fallen in sympathy. Exxon Mobil Corp (NYSE:XOM) and Royal Dutch Shell should benefit from the loss of share BP has and may continue to give up at the pump.

However, in the short run, both of these competitors have seen their share prices experience pullbacks. XOM has seen its stock dip from a high of $69 to a low of close to $57, a 17% drop, while Royal Dutch Shell has experienced a -23% return over the same period. The loss of revenue at the pump together with the public outcry over the environmental damage from this spill may spell increased cost for BP, but may also provide its peers with some positive upside. (For related reading, check out A Guide To Investing In Oil Markets.)

Substitutes
The media coverage of the oil spill has led many to renew the public campaign against the use of oil as the main fuel source in the United States. This negative campaign has highlighted the other sources of energy available for use, such as natural gas and renewable energy. Onshore drillers like Helmerich and Payne (NYSE:HP) explore and drill for fossil fuels on land. These companies could see a boost as natural gas is abundant in the U.S. and does not suffer from some of the same negative image that oil does.

However, natural gas, similar to oil, is likened to be detrimental to the environment. As such, companies that deliver renewable, environmental friendly energy, like solar companies First Solar (Nasdaq:FSLR) and SunPower (Nasdaq:SPWRA) may be the biggest beneficiaries of the public campaign against oil and other fossil fuels.

The Clean-Up
This oil spill will require years of clean-up work to restore the area so that the local people can return to fishing and other activities along the shore. Companies that perform activities such as dredging may be the ones called upon to clean the beaches and shorelines, as well as ready the ports. Orion Marine Group (NYSE:ORN) operates as a specialty marine construction company along the Gulf Coast and in several other areas. It has several lines of business, including dredging, excavation and repair. This is a very niche market, and with a spill this large, may provide this type of company with vast opportunities.

The Bottom Line
The Gulf tragedy may spell disaster for BP, but may result in numerous opportunities for its peers and other energy companies as well as companies which will aid in the clean up. These opportunities should translate into upside for these companies' stock prices. (For related reading, check out What Determines Oil Prices?)

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