An oil company's track record on spills—and whether it is prepared for future accidents—has become increasingly important to investors now that oil exploration and extraction is moving offshore and into risky areas like the Arctic or South America.
That's the message of an analysis released this week  by MSCI Inc. , a New York-based investment research firm. It rated 30 of the world's largest oil and gas companies on their investment attractiveness based on their history of spills and environmental management, as well as the riskiness of the areas they are exploring. BP  and Chevron  were singled out as companies that are poorly positioned in this area. The Norwegian company Statoil  and Britain's BG  were found to be the best positioned for a riskier era of drilling.
The report said that environmental incidents have become the biggest factor in determining a company's investment risk, overshadowing other factors like its relationship with its employees or its partnership with host governments. Spill records and safety cultures will become even more important in the future, because of what the report describes as the industry's "increased appetite for complex and challenging unconventional oil and gas projects."
The analysis was prepared by MSCI's research arm, ESG Research , and is the latest in a series of annual ESG reports on a variety of topics involving oil and gas companies. MSCI serves investors worldwide, including asset managers, banks, hedge funds and pension funds.
Yulia Reuter , ESG's head of oil and gas, said, "large environmental accidents can substantially affect production." A shutdown in production or the loss of leases can affect a company's financial standing and performance. After a major spill, stock prices often drop, sometimes as much as 20 to 30 percent, she said.
For example, the 2010 Deepwater Horizon spill  in the Gulf Coast, which spilled 4.9 million barrels of oil, is still sending shockwaves through BP. The company announced on Tuesday that it has reached a settlement with the U.S. government and will pay a record $4.5 billion in fines. BP will also plead guilty to 11 counts of felony manslaughter, one count of felony obstruction of Congress and violations of the Clean Water and Migratory Bird Treaty Acts. The company still faces potential civil penalties.
Reuter said that while large companies can usually absorb heavy fines, the real damage is to their reputation and management. In the aftermath of the BP spill—the largest in U.S. history—CEO Tony Hayward resigned  and the company announced plans to sell $38 billion in assets  to cover liabilities from the accident.
"And that, of course, impacts their reputation elsewhere," Reuter said, including in negotiations with foreign countries for drilling leases.
Chevron was identified as a high-risk company because of its history of large spills, including a November 2011 accident  that spilled between 2,600 and 4,000 barrels of crude off the coast of Brazil.
The Canadian crude producer Suncor  and Colombia's Ecopetrol  are also considered high-risk companies because of their work in unconventional oil sands basins and South American rain forests, where extraction can be more difficult and the sensitive environment conducive to accidents.
The analysis said investors would be safer with companies that are either working in relatively familiar onshore areas or are well prepared to deal with accidents. Reuter said the best companies generally have environmental specialists who report directly to management or have set up environmental management strategies ahead of time.
In unfamiliar areas like the Amazon or Arctic, Reuter said it's especially important for companies to do advance research, including working with local communities to minimize the projects' impacts. In countries where regulation and enforcement are lax, she said companies must shoulder the burden of regulating themselves.
"What type of operation they're doing, and where they do their business, can tell us how risky the business is," Reuter said.