BP's Fall; other Big Oil plays

Shares of BP are down nearly 50% YTD mostly due to the Deepwater Horizon disaster. Some of their European competitors Shell (RDS.A) and Total (TOT) are also down 12% and 24% respectively. Comparatively XOM is down just 9% and CVX just 2.5%.

The uncertainty in the European Union and Euro currency is eclipsed by the uncertainty in the oil industry itself for these stocks. Clearly the European oil companies are feeling the effect of uncertainty in both areas. For a long-term investor, I believe this creates opportunity.

Certainly if you were holding BP and managed to sell on the frontend of their 50% slide (I am still holding large amounts of BP), now might not be a bad time to put that money back into the Oil & Gas sector. There are some very attractive choices right now.

I have added shares of Total (TOT). I believe their price drop has been exaggerated, even given the Euro issues. In this sector a strong dividend is a must for me, and Total does not disappoint with a +6% dividend. Over the last month, Total has preformed better than the rest of the oil majors.

A note about industry regulation. Given the possibility of heavy regulation, and lifting of liability caps, I do not think it would be wise to invest in oil companies that have a smaller market cap. Limited operating cash and overall size would likely hurt their ability to be competitive in a highly regulated, and high liability industry. For now I will stick to only the oil majors.