BP and taxpayers

[gingercat12]

Am I the only one worrying about BP eventually being bailed out by British taxpayers? It would not be the first case (see our glamorous banking system). They are too big to fail (just think about our meagre pensions) and do not seem to have a handle on the oil spill at all.

Summary from an article in today's New York Times which states that no one (company or regulator) had overall responsibility for the safety of the rig:

''The Deepwater Horizon rig operated under the hazy authority of multiple corporations and regulators, with no one in charge of safety, The New York Times reports. Regulations for offshore drilling have evolved in a piecemeal way, with the few deepest drillers getting many exemptions to safety procedures adopted for drilling in shallower waters. Regulators appear to have given little attention to BP?s emergency spill plan?the documents contained a link to an Asian shopping site and mentioned protecting walruses, creatures not too common to the gulf. Rig workers described a conflict between BP, which made more cash by drilling faster, and Transocean, paid by the day, which made more money by drilling slower. And costly delay in drilling led to missed signs of danger: A Halliburton worker fretted about cement use, another about casing quality. At the same time, regulators granted BP a pass in testing its blowout preventer.''

That article doesn't make sense to me, Earlybird

Am no expert in the field, but I've done a couple of projects for Oil & Gas companies, and what generally happens is that a rig-owner (here Transocean, I think) leases a rig to a rig operator (here BP). Transocean would have nothing whatsover to do with the operation of the rig. Simply because it is paid a daily rate for leasing the rig doesn't mean at all that it had any impact upon the way in which it was operated.

So that article makes no sense to me. All it tells me is that the writer doesn't know much about Oil and Gas

How does it not make sense that someone who rents rigs for a living would not want to rent it for longer?

I did a presentation on this last week and my feeling then and now is that BP will eventually sell its North American oil assets as it will find too much political opposition to it being allowed further drilling licences in the US.

I do not think BP will go bankrupt OR need to be rescued though. The estimated cost of this is $20 bn spread over several years and some of it will be borne by insurance and the operators of Deepwater Horizon. All that will be fought out in court over several years.

Pension funds have been hit hard by this and I do think it likely that BP will cut its dividend in the end. The much bigger threat to BP (and other oil companies) is a future drop in oil prices. I would certaily consider it a buy after the oil price has dropped and when absolutley no one wants the shares.

All politicians in the US are playing politics with this issue as it is a UK company and it is the mid term elections. Things should calm down once the well is under control (possibly in about 3 months time) and the mid term elections are over.

I feel sorry for Tony Hayward (CEO of BP) as it could have happened to any company.

I did a presentation on this last week and my feeling then and now is that BP will eventually sell its North American oil assets as it will find too much political opposition to it being allowed further drilling licences in the US.

I do not think BP will go bankrupt OR need to be rescued though. The estimated cost of this is $20 bn spread over several years and some of it will be borne by insurance and the operators of Deepwater Horizon. All that will be fought out in court over several years.

Pension funds have been hit hard by this and I do think it likely that BP will cut its dividend in the end. The much bigger threat to BP (and other oil companies) is a future drop in oil prices. I would certainly consider it a buy after the oil price has dropped and when absolutley no one wants the shares.

All politicians in the US are playing politics with this issue as it is a UK company and it is the mid term elections. Things should calm down once the well is under control (possibly in about 3 months time) and the mid term elections are over.

I feel sorry for Tony Hayward (CEO of BP) as it could have happened to any company.

DH is a fund manager in the pensions arm of a major US bank - he is of the view that this is fill your boots time not get worried time.

He actually sat and laughed for a while at some of the !

Why it doesn't make sense is that the rig is an asset on a lease, and the lessees have no input in the operation of the rig therefore there can be no 'pull' in the opposite direction in the way the article describes

lessors sorry, not lessees

Summary from article in current issue of Rolling Stone magazine:

"'The good news is that the oil cap is collecting more oil than expected?about 15,000 barrels a day. The bad news is that this means much more oil is spilling from the leaking geyser than has been estimated. How much exactly? A new Rolling Stone article has some scary numbers: According to the magazine, the official estimate of 12,000 to 25,000 represents just the ?minimum estimate.? The scientist Timothy Crone, who consulted with the government, said it could be as much as ?100,000 barrels a day.? The median for the scientist?s calculating is 55,000 barrels a day??the equivalent of an Exxon Valdez every five days.? ?That?s what the plume team?s numbers show too,? says Crone, and Rolling stone notes that ?the industry privately agrees with such estimates.?

MadameCastafiore - well, your dh may know best but I've got one thing to say to him ' AIG '. Two years ago no one thought that firm could fail either, and look where it is today. Barely functioning. No dividend. Shares worth a tiny fraction of what they were worth in June 2008.

FWIW, the share price of BP stock is down 14% today alone in America. I sold most of my stock a month ago, thankfully. Think I will unload the final 100 shares today while they're still worth something......

Earlybird I am with you on this one.

Here is part of an interview (released today) with an expert who predicts bankruptcy (Chapter 11) for BP:

"What do you think is in store for the future of BP?

They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11."

Full article here:

money.cnn.com/2010/06/09/news/companies/simmons_gulf_oil_spill.fortune/index.htm

Here is one for MadameCastafiore's charming DH to laugh at World Cup results could affect London stocks

Estimates of the amount of oil spewing daily into the ocean have just been raised to 60,000-80,000 barrels per day. This is an unmitigated disaster.

One US commentator has said this is now far more than an environmental disaster - it is an environmental calamity. In addition to the environmental/wildlife consequences, it could also cause major consequences with respect to real estate, food production, weather, etc.

TBH, I'm a bit amazed there isn't a current thread running on this. Why not? Doesn't the Mumsnet community have an opinion?

I am surprised as well. But I'm also confused as to why BP is being held totally responsible for the spill and the clean up. Was it not a US company that operated the well and another US company that built the kit that broke? Why are we not pooling resources to do whatever's necessary and arguing about blame later? Or am I just being naive here?