Comment: Trials and tribulations for "downsizing" BP THE civil trial over BP's image-defining Deepwater Horizon calamity in the Gulf of Mexico, just starting in New Orleans, will be a reputational mess. This despite the considerable damage limitation the British oil major has done since the 2010 disaster claimed 11 lives and pumped five million barrels of crude into the Gulf. The US government, states bordering the Gulf and an army of private plaintiffs are said to be seeking $20bn (£13.2bn) in penalties from BP. But that's just the half of it. Raked over forensically again will be the causes of the catastrophe, security failings and management shortcomings at BP and its junior production partners. Allegations of profit before safety will doubtless raise their head. The trial and ongoing lurid headlines should show how relatively elegant by contrast has been the oil giant's exit from its finally ill-starred TNK-BP venture in Russia. Although the latter has led to much acrimony, the j/v was a rich source of dividends for BP over many years, and it has got out with a solid chunk of money and a 20 per cent stake in Russian state-owned Rosneft. No such neat ending looks possible re: Deepwater Horizon. The court action will last all of this year, and more. Even at litigation's end, BP, which has already paid $20bn into a Gulf of Mexico trust fund, will be a smaller oil and gas outfit with reduced ambitions, and a greater focus on profit margins as opposed to footprint. Energy leviathan, no more, but knocking around at the top of the second division of the industry. BP has already sold $38bn of assets, both to help pay for the Gulf clean-up, America's worst environmental disaster, and put the group on the path to becoming a more focused energy explorer. But it is difficult to estimate how long the company will remain damaged goods in the eyes of the US public in one of the biggest energy markets in the world, while better profit margins remain an aspiration, rather than accomplishment. BP's profits fell last year, and it is difficult to see 2013 being much more than a year of consolidation for the group. Investors will therefore probably be looking at a business still in strategic transition for the foreseeable future, with no guarantee the trick can be pulled off or worth it in the end, played out against a backcloth of negative headlines from New Orleans. For any BP stock market investment case, the phrase no-brainer does not currently spring to mind. Italian uncertainty will scare market horses A hung, Italian general election result, if that is what we get, will disturb financial market nerves given that the country is the fourth biggest economy in the eurozone. Markets dislike uncertainty, and any fragile coalition, centre-left led or not, backed by outgoing technocrat premier Mario Monti or not to lend gravitas, will be destabilising. Late reports yesterday that the risible "Bunga Bunga" Berlusconi might scrabble enough power in the Senate upper house to paralyse a centre-left administration just adds an element of the surreal to proceedings. Of course, down the decades Italy has made an art-form out of short-lived political administrations that often tantalisingly do not quite scare the economic horses. But the recovery from two years of euro turmoil has not got enough traction yet. There are wider ramifications.