(By PHIL DRAKE, Montana Watchdog) The BP oil spill in the Gulf Coast has wreaked not only environmental but financial havoc since it began April 20. But as other states investing in the oil giant have lost money, the state of Montana’s investment system managed to make $92,000, an official said this week.

“Our external managers began buying and selling BP stocks since the oil leak and actually made a profit,” said Carroll South, executive director of the Montana Board of Investments, which is authorized to invest the state’s funds, including all state and local pension funds.

 

As of late June, the retirement fund still had 759,000 shares of BP stock, South said. But the BP holdings are a drop, or perhaps less than a drop, in the state investment fund’s $6.6 billion bucket, the director said. “It makes very little difference to the pension fund because (the BP stock) is 6/100ths of 1 percent,” he said. Although the price of the BP stock has decreased, “You don’t have a loss until you sell something,” South said.

In Virginia, the state’s retirement funds had lost more than $21 million since April. Officials there told Old Dominion Watchdog, an online news service, that the stocks constituted one-tenth of 1 percent.  The stock has lost more than $75 billion in market value since the spill started three months ago, an investment expert said July 20.

 “Just in general terms, it’s been a devastating impact for investors,” said Brian Youngberg, a senior energy analyst with Edward Jones. He said BP was not expected to pay any dividends on its stock until early 2011.

“They didn’t have to cut dividends, but the White House put pressure on them to address the spill and give confidence that they would pay reasonable claims,” Youngberg said. Most state retirement plans, such as Montana’s, are well diversified so when something like this occurs it does not have a devastating impact, he said.

Since the spill it’s estimated that as much as 184 million gallons have gushed into the Gulf.  The cost of dealing with the spill has now reached nearly $4 billion, BP officials said. They said they have paid nearly $207 million to settle damage claims. BP was able  to cap the well on July 15, and officials are monitoring its progress. But the company’s stock and reputation has paid a toll.

 “Up until three months ago, BP was an AA-rated stock,” Youngberg said. “It was a top performer.” On Day 1 of the spill, BP stock was at $60.50, he said. It has since hit a low of $26 and climbed back this week to $35.

Youngberg said Edward Jones was not advising investors to put money into BP stock. “For the time being, there are better opportunities for investors.” He said those with diversified portfolios could ride it out. “The long term potential is there, but the range of outcomes is quite wide,” he said.