If BP doesn’t loose enough credibility, and indeed money, to destroy itself, it will surprise me. The financial liability alone involving the loss of 11 lives should be enough to ruin any company even if it hadn’t been technically culpable. In this instance, I don’t understand why criminal negligence charges couldn’t be filed against the people who run this thing. Besides that, the environmental damage is beyond calculation—I believe the company is being fined around $4,000 a day so long as the well flows. The liability associated with environmental losses would bankrupt King Midas and we won’t know for months, probably even years, what this will amount to, if ever. This may be an oversimplification, but the way I understand it is that the rig workers who were the ones with the greatest knowledge of what was occurring within the wellbore observed a great increase in pressure and thought the heavy drilling fluid should remain in place in order to contain the well. However, drilling fluid is expensive, the well was finished except for setting a temporary cement plug and the fluid was needed for another project. Seawater is free so it was decided by the higher ups to replace the drilling fluid with seawater and all the rest is history which is still in the making. What we have is financial expediency placed above all other considerations in addition to gross incompetence. Ed Wallace on his nationally syndicated show “Wheels” made the point that over 14,000 offshore wells have been drilled without a mishap. However, that is small consolation now. He could not understand why there wasn’t some kind of plan in place for such a contingency as this. Even though outright fraud may not have been involved as it was in the case of Enron, the name BP or British Petroleum should be so completely sullied by association with this disaster that the company should become worthless.
BP Should become ENRON
By P N Dr Lo R Follow Mon, 31 May 2010, 9:57am 624 views 6 comments
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Portland, OR
And don't forget about the BP Texas oil refinery explosion in 2005 which killed 15 and injured 170+.
from wikipedia: On March 23, 2005, a fire and explosion occurred at BP's Texas City Refinery in Texas City, Texas, killing 15 workers and injuring more than 170 others. BP was charged with violating federal environment crime laws and has been subject to law suits from the victim's families. Later an $87 million fine was imposed by the US Occupational Safety and Health Administration, which claimed that BP had failed to implement safety improvements following the disaster.
And the Prudhoe Bay leak in 2006
from wikipedia: The Prudhoe Bay oil spill (2006 Alaskan oil spill) was an oil spill that was discovered on March 2, 2006 at a pipeline owned by BP Exploration, Alaska (BPXA) in western Prudhoe Bay, Alaska. Initial estimates said that up to 267,000 US gallons (6,400 bbl) were spilled over 1.9 acres (7,700 m2), making it the largest oil spill on Alaska's north slope to date.[1] Alaska's unified command ratified the volume of crude oil spilled as 212,252 US gallons (5,053.6 bbl) in March 2008.[2] The spill originated from a 0.25-inch (0.64 cm) hole in a 34-inch (86 cm) diameter pipeline. The pipeline was decommissioned and later replaced with a 20-inch (51 cm) diameter pipeline with its own pipeline inspection gauge (pig) launch and recovery sites for easier inspection.[2] In November 2007, BP Exploration, Alaska (BPXA) pled guilty to negligent discharge of oil, a misdemeanor under the federal Clean Water Act and was fined US$20 million.[3]
So why the hell are they still in business?!?!
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Leigh saysSo why the hell are they still in business?!?!
That's going to turn out to be a billion dollar question!
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So why the hell are they still in business?!?!
* 20 billion barrel equil in proven reserves, 70B current assets
* Worldwide exploration, upstream and downstream asset inlcuding refineries
* xxx billion in unproven reserves and claims to these reserves subject to exploration.
* 20-30B in operating profits, and about 30B in operating cash flow.
* In the end, oil and gas, including exploration and refining is just a commodity and commodity business is the least likely to be effected by branding. It's not like refiners will pay less for oil and gas sourced from BP. They can easily change their name.
* While the liability and response cost will bust anything known historically, it is still within the mutli billions range (20-30B?). In the end, BP is still one of the top employer and tax customer of the US, so it's not like they the government want to kill them, just compensate for the damage accordingly. Cut dividends, reduce capital expenditure, sell bonds, sell assets, raise equity are all viable options.
* BP is a 65% owner of the leaking well. That means the arrangement is likely a separate entity arrangement and a portion of the cost will be pass thru to their partner and insurer.
* If the common price are weak enough, look for the even bigger oil and gas to buy them out.
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And that is my hope is that a company with a better safety record will buy them out and turn them around. This is ridiculous.
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elliemae's website
As long as they're rewarded (in the form of profits without penalty), they'll remain in business. I wonder if insurance will cover any of this?
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Most politicians get lobby money from BP. Hence, BP will get the justice that it has paid for.