BP's financial pain is America's pain

President Obama should be told that if he keeps kicking BP when they're down then he'll have to find another 10,000 or so troops for Afghanistan, because our lads will be pulled out. One bad turn deserves another and the way he's acting is cheap politicking. Caledonian Comment

BP can steady its share price? At the present time?

Really, Robert?

You're 'aving a larff, mate!

More seriously and correctly you hint at the damage some real substantive action from the US Government against BP would have on its own oil companies looking to prospect in deep water as well as the pensions of US citizens whether they hold UK or US Oilco shares in their funds or personal portfolios. Which tends to suggest that a lot of the noise from the White House is 'grandstanding'.

It should be remembered that some of the big bill for all of this is going to land on the mat of US companies, not BP.

On topic but a slightly different tack, I have been a bit surprised at BP's PR in relation to this sad event. Who is doing it for them? Have they got one of the established Disaster Management PR companies on board or are they trying to do it all themselves - 'in house'?

As the operational and material/construction side of this rig were all under US companies, I think Obama is out of line. Then again I was never expecting much from him.

On the assumption that BP trades in the USA through a subsidiary company it could assuage criticism in America by agreeing not to pay dividends from the USA subsidiary to the parent company until the costs of the clean-up are known but there is no justification for withholding dividends payable to shareholders from its non-USA operations.

BP have said they are going to fix the well, clean up and compensate legitimate claims. What else can they do?
Lessons will be learnt by the whole industry and better procedures and practices for deep sea drilling implemented.
Obama needs to realise the implications of his current actions. By ruining BP, other oil companies will think twice about the risks and consequential losses of running operations. Oil prices will go up and the US further dependent on foreign energy.
If Obama does not lay off with his continued attacks, what should BP be doing next?
1. Cancel the dividend payment and use cash to buy back shares.
2. BP accept the £75 million liability cap and do nothing else.
3. Sell all US assets to Sinopec/CNOOC cheaply and walk away.

Little Bo Peep has lost her oil, so why don't we sell her to the Chinese, or the Russians, or the Libyans... or Hugo Chavez
Really?

Come on Cameron, time to step up and tell Obama where to shove his cheap lefty point scoring. This is getting silly now. The responsibility for the leak isn't even all BP's but the subcontractors. And remind me why we're even doing deep water drilling? Oh yes, it's because wasteful Americans burn vastly more oil per head than anyone else on the planet and we need to feed their insatiable demand.

What next, BP to compensate football fans for England losing on penalties in the World Cup? Get real Obama this is ridiculous.

Robert Peston wrote:Or to put it another way, in a world of global capitalism, Obama can't punish BP and expect all or even most of the pain to be felt in Britain.

Are you saying that BP is another one of those TOO BIG TO FAIL companies, Robert? I thought we already covered that in our previous lesson?

BP should, as both PR exercise and the right thing to do, set up a trust fund and put a few billion dollars in it now. The fund would be there for future claims and would be topped up each year.
The contractors involved in the Deep Water Horizon project could chip in too, initially as goodwill unless any liability is found to be theirs in any future inquiry.

"By the way, if you're a Brit saving for a pension, you're probably, indirectly, a BP owner. So as Boris Johnson, the Mayor of London, implied this morning on the Today programme, you should probably be alarmed that President Obama has been knocking your company about the head."

The day anyone should listen to Boris Johnson is the day we should switch the lights off in Britain and shut it down completely. Shouldn't he be a bit more concerned with the impending tube maintenance strike, the '3 years overdue' maintenance on some tube lines or his personal crusade to remove democracy completely from outside parliament? (it was removed inside parliament years ago!)

Just as I have repeatedly said before - pensions are merely a way off making sure 'everybody has their hands in the cookie jar' - so more people will feel happy to make sacrifices in order to protect the corporations.
If ordinary people actually sit down and work it out - they stand to lose significantly less than the oligarths of the world, however it's clear the media aren't going to ever point that out (well look at who owns them)

However the share price is only half the story - check out the biggest corporate CDS spread deterioration yesterday - the top 4 are all involved in this mess - and look at the daily jump!

https://www.markit.com/en/about/news/commentary/cds/cds.page

Nearly all of them rose more in a day than they they have in the last week - that is severe market reaction by any measure.

To big to fail? - we're about to witness 'far too big to fail' and with no bailout left who will save this corporate giant?

On the brightside all those SRI funds will rocket in value as they don't invest in oil companies - or has that one been subverted through the medium of 'clean energy' sections of the oil giants?

You see what the good old BP story has done is covered up 'the other oil spill' which is going on right now, a spill where the amount 'cannot be quantified'
https://saharareporters.com/real-news/sr-headlines/6244-exxonmobil-oil-spill-in-niger-delta-exposes-nigerians-to-poisoned-fish.html

Still - that's in Africa so nobody cares do they - we only listen to the loud Americans in our partially deaf media and show concern for our pension funds - not the environmental damage or the people who suffer (Florida may suffer, but they will survive - fish is all some Nigerians have)

It seems Obama, like everyone else, is quick to forget his heritage whilst following his own self interest - or the self interest of his country.

you should probably be alarmed that President Obama has been knocking your company about the head.

No. No. No.

we should be alarmed that a company we own (and with the B standing for British, so bang goes our national reputation) should be so B&*%$y stupid, so arrogant, such a big risk taker with the environment and the livlihoods of so many people - all those fishermen, all those people making a living from ocean front businesses, .... and what flag was that rig flying?

Is this all hot air, or will BP get seriouly punished by the US administration? If they do get their backside kicked, I bet the bankers (sorry to bring that topic up again) will be falling over themselves laughing about how they caused multi-billion $ 'economic' damage, got slapped wrists and one year of low bonuses.

The owners of BP have a number of reasons for choosing to hold BP shares. the reasons are so varied that we cannot attempt to know what they all are.

It is a fact however that BP's owners have appointed a management team whose actions have caused many many billions of pounds worth of damages to the company's number 1 trading partner.

If the owners of BP do not wish to set aside reserves to help their trading partner then BP loses its tading partner for ever and it gets seen forever as a fair-weather friend that runs away from its liabilities at the first whiff of trouble.

There are times when business owners have to do what is the RIGHT thing......even if they are are themselves in difficult circumstances.

Obama has called this 100% correctly.

I agree with much of your analysis, other than it having ramifications for future US offshore exploration.

Obama is kicking BP because it is a foreign firm trading in the US. It has no implications for US firms exploring for oil in the US.

Someone should be asking him where he stands on Union Carbide and Bhopal - thousands dead but not a single US spiv in jail. Don't expect any even handed treatment with regard to US firms.

Dear President Obama

Which major industialised country consumes the highest amount of energy per capita?

Which country has consistently blocked measures to deal with climate change issues?

To satisfy the energy consumption of which country do BP and other oil companies engage in every more risky exploration?

Answers on a post card please.

another gas pipeline incident in texas, 3 dead from 2 explosions in the space of a week.
what is the common denominator?
BP or lack of safety culture amongst gung ho roughnecks?
With the number of high profile incidents this year one begins to wonder whether the US is competing with China for the prize for worst industrial working practices!

It isn't just the coast line of the US.

How much oil will land on the beautiful islands that depend on tourism (Antigua etc) in the area, or swept into towns when the storms arrive? Ocean currents means plumes of oil can be carried off - will it break up and disperse our will the the Irish wake up one morning and wonder what that stuff is down on the beach?

Sadly, this might be the environmental wake up call disaster that certain nations and companies were needing for them to realise the true cost of business. But you know the saying by now - 'too big to fail'!

US savers deprived of a 4 billion? Hmm. for some perspective on the value of money, I heard on the grapevine that the security costs for the last G20 meeting came in close to 1 billion...surely not? If that price is right then I can't help wondering just how many protestors were there (or were expected) for it to cost so much.

What is quite interesting over the last few days is that the US Congress has increasingly ratcheted up the rhetoric on BP. Not least with some 15 Congressional committees "investigating" BP, it seems they all want to be seen to be doing something. They have found it convenient to consider BP a British company because like all Hollywood movies the Brit plays the 'baddie' and the American the 'goodie'.

It might bemuse some Congressmen to find that BP has quite a lot of American in it ...

Appreciate that this incident has caused potential electoral problem for President Obama. But, as Robert says, BP is a global organisation and the impact of talking it down hurts the US almost as much as the UK.

In a wider context, is America seriously content to drive down the value of BP to the point that it could drive the company's global oil reserves into the hands of PetroChina?

I recall when Microsoft first started to get into hot water with US legislators.

It was suggested at the time that their real problem was that they were naiive enough, and arrogant enough, to think that they did not need to pay 'political dues' on Capitol-Hill. By 'political dues' I think the reports meant "paid lobbyists" in Washington (also known as "bribes" or "protection money").

Do you think BP might be guilty of the same failing, Robert (albeit to a lesser extent)?

Well, I think the time has come about now for us to hit back. These statements that US politicians are making are pushing the BP share price further down and impacting worldwide shareholder prices down. Political posturing around this company is tantamount to manipulating the share price and needs to be reviewed by the Securities Exchange Committee. There are people benefiting from short selling here and it wouldn't surprise me if some of the US politicians are benefiting financially from this.

I, for one, would happily be part of a class action against the US Federal government for manipulation of the market price of BP. By threatening these actions against BP they cannot say that they do not understand the consequences of losses made by individuals and pension funds.

I used to consider the special relationship just that "special". Forget that now. We do not need to bolster US foreign policy, quite frankly, this isn't just hitting BP any more this is impacting the British people and if Obama and his ilk want to continue to get our support then they need to back off now! Otherwise, we need to start putting pressure upon UK politicians to make savings in other areas, like not spending huge amounts of money putting our troops in harms way to assist the US in their wars.

I wonder if they would be so keen to stop deep water drilling if that means that the price they pay for petrol would increase to the levels we pay?

I am also getting a bit fed up with the rhetoric when you look at the responce on Piper Alpha or Bhopal and taking responsibility.

Actually, this is what a friend of mine sent me this morning, he's much smarter than me!

"The US are importing 70% of their oil, they consume 24pc of the world's oil and they are like Northern Rock shortly before it collapsed, but unlike Northern Rock there will not be anyone to bail them out.

Why does Obama's administration not -

1. value friends like the UK (and they have few enough friends as it is)
2. nurture the oil industry which keeps them running, without it they would be sent back to the 17th century or worse.
3. invest in solar energy and fund research in Physics to a much higher level.
4. develop their space industry. Instead, they are withdrawing funding from NASA. They could not understand that the sunlight flux in space outside the atmosphere is 70 x the level on the surface of the Earth, that the solution to our energy needs is to build the space elevator, and a large solar array in space. Their is not any dust there (as there is on Earth), so the panels would not even need to be cleaned.

I believe in the ingenuity of the human race, that humanity will go on to great things. But as far as I can tell from history books, the USA is a massively overexpanded empire in terminal decline, just like the Roman Empire in its last stages. As its mineral resources decline, along with its manufacturing industry, it has been compensating by borrowing money and in the spirit of non-linear dynamics, its collapse will be dramatic.

Here is my timeline for the USA:

2014 Global oil production peaks.
2015 - 2018 Credit declines and US stockmarket slides continuously
2018 - 2025 Severe disruption to economy as oil supply depletes at 2 -4 % per year.
2025 - 2040 Standard of living reduced significantly, food shortages
2040 - 2050 American society collapses completely, with looting and murder widespread. Mass
starvation, population declines to less than half its current level.

Can they avoid this future ?

China will no doubt bnuild the space elevator by 2050 and will become the undisputed leader of the world, with a technological civilisation that will dwarf ours. The first man on Mars will be Chinese!"

For Obama to be laying into BP is a bit rich, I think. Yes, this is a disaster and they were making big money from drilling in deep water with what turned out to be inadequate plans for what to do if things went wrong, but so is every other oil company, because the market demands it and the governments of the world allow it. It's rather like the banking crisis in that respect, with the difference that BP has said it will pay for the clean up (even if they aren't doing it as well as many would like), while governments and tax payers are the ones paying for the bankers mess.

If any of the US oil giants had a workable plan to fix this, they would be there helping out. Instead, they're keeping their heads down, counting themselves lucky it wasn't them and keeping their fingers crossed that it doesn't happen to them.

It's the cost of cleanup and compensation that's concerning markets.

"The ultimate cost of the oil spill to BP is highly uncertain. Citigroup estimated the total liability for containment, cleanup and compensation at between $3 billion and $8 billion. Insurer Willis Group Holding said the total cost could amount to $10 billion to $15 billion. Goldman Sachs noted that BP's share price movement suggests the market expects it to bear in excess of $30 billion in pre-tax losses related to the spill."

https://online.wsj.com/article/BT-CO-20100610-703635.html?mod=WSJ_World_MIDDLEHeadlinesEurope

$30 Billion for a company with a current market cap of approximately $100 Billion?
Sounds like a real problem to me, there are estimates flying about based on possible interference from hurricane season which put the cleanup costs and compensation well over the current market cap - which I believe make it insolvent.

What is most frightening at the moment is the speed at which things are happening. It may seem like 'slow news' to some, but under the cover many significant events are going unreported. Sovereign debt is still deteriorating - and remember that EU bailout? - well exactly, where is it? What's it doing? I mean a Trillion dollars is nothing to be sniffed at but for some strange reason the markets no longer see bailouts as producing long term 'real' growth.

....now I wonder where they got that idea from....??

Why should we continue having bodies come back through the streets of Wootton Bassett when the american president is treating our pensioners so badly?

We ought to send the planes out to get them back today.

Actually, just reading through this blog and thinking more about how US politicians want to fine BP and withhold dividend payments, BP needs to stop paying any more into this disaster.

They've paid well over the $75m that they were obliged to do. They need to start thinking about the potential fines and hold back the funds in anticipation of that. I no longer back the company using my shares to fund the clean up. Let the US government sort this out themselves now, they're obviously well qualified to deal with this as they repeatedly demonstrate.

Time to play hardball Tony. Either the US politicians shut up or BP reneges on ANY promises.

I am surprised that BP is taking this on the chin from the US. If any real blame should be taken look back to the Bush administration and the Texas oil billionaires. Bush, not long before leaving office, said that he didn't care about ecological issues when drilling in the Gulf of Mexico because it was in America's economic interests. Bush said the same about Kyoto.If BP had not been invited in to pull the chestnuts out of the fire then someone else like Exxon would have had to do it. I'm not fond of multinational monopolies but BP is a top investment company in the FTSE, unfortunately our pensions and much of our savings depend upon BP. Not only that if GDP and growth is supposed to help us out of recession and pay off the deficit then BP will play a great part.I can understand the Americans crying about their beaches and fish etc but they do not bleat about the rest of the world's problems or the damage to other countries caused by them. This a terrible disaster but the US has to be held responsible for squandering oil resources and deciding to carry out this deep sea drilling without being properly prepared in the first place. I hope Britain does not continue to Kowtow to the US and BP does not turn its belly up to Obama's beating of the drum and demanding that BP should pay. The Texas elite should take the lion's share of responsibility.

So the Omaba White House is pushing for a capricious suspension of property rights! His hard left agenda, airbrushed over when running for President, is shining through!

I had such high hopes of Obama. He is now revealed as just another cheap politician milking the BP tragedy for all he is worth to protect his own skin. Wake up America - this crisis was waiting to happen if not with BP then with another big producer struggling to keep up with the demand of a gas guzzling nation for cheap petrol by drilling offshore at the edge of technical know-how. Show some real statesmanship by supporting BP as it struggles to get this under control; take more of a lead in saving the planet from the consequences of greedy over-consumption and save your rhetoric for genuinely helping the people and wildlife affected. BP is just as much a golden goose for its American investors as for those in the UK - kill it and reap the grateful thanks of two nations made poorer by a president whose ignorance is only exceeded by his arrogance.

#5. At 10:35am on 10 Jun 2010, Greenbeacon wrote:

On the assumption that BP trades in the USA through a subsidiary company it could assuage criticism in America by agreeing not to pay dividends from the USA subsidiary to the parent company until the costs of the clean-up are known but there is no justification for withholding dividends payable to shareholders from its non-USA operations.
_________________________________________________________

Spot on Greenbeacon, I like your thinking and it should let the pain be felt were it needs to be felt, in US pension funds and the US markets.

#3 Up2snuff

"I have been a bit surprised at BP's PR in relation to this sad event."

It could have been worse. They could have got Clarke and Dawe to do it for them:

https://franklyfrancophone.wordpress.com/2010/06/06/the-front-fell-off/

Obama is way out of line on this one. The hypocrisy of the US is quite astounding when you look at similar disasters that US companies have been involved in worldwide. One example, Americans appear to have forgotten the thousands of people that were killed in Bhopal and continue to die from the remaining pollution that nobody in the US wants anything to do with.
So far BP has reacted admirably but I now expect them to change policy and hire a load of US lawyers to stem this unrealistic loss in value in its share price. If the US continues with this hate campaign and forces BP down the pan the world will be a much more scary place to do business in the future.

Obama is just getting his own back on us for , our Government at the times constant bashing of America during the economic crisis.

When this is all over,the legal side to this will be very messy, in the mean time its in everyones interests to back BP and what they are doing or come up with an alternate way to do things, because as i see it BP are the only company that can solve this .

One thing i guarantee is that oil companies worldwide will be made to fit a fail safe device that is fail safe....

I have a lot of time for Obama but he needs to stop exporting blame from the US:
1. It is BP in the US that is not performing NOT BP Global
2. The financial disaster was caused by Wall Street
3. Iraq war would be 3 weeks long - Bush/Rumsfeld

The blames lies at the door of the US culture of deliberate ineffective risk management driven by the fast buck mind set ie it will never happen to us we will get away the risk - cowboys !!!!! Which just about sums up the past president and his supporters.

Transocean – the drill rig operator and Halliburton together with the regulator MMS all US and are heavily involved in this oil spill not just BP.

As for ‘US interior secretary Ken Salazar said that BP should compensate other oil companies that have had to lay off workers’ ref BBC website. Shall we seek similar compensation for laid off UK workers due the US bankers socially useless and economically disastrous actions to fill their pockets at the expense of all of us?

Americans eh? want the stuff then moan, now there is a thread that keeps on coming up in my comments.
I agree that it is a major incident, but was the platform that stated this american?
The lawyers will have a field day and most of the money will go to them in fees...

If it does come to court action, surely Obama's various outbursts on this topic will come back to haunt him. In any court of law in this country such statements would be seen as prejudicial as there hasn't even been a proper inquiry into what went wrong yet. Or am I mistaken in this?

It was a BOP built by a US company and checked and installed by a US drilling crew that failed in this case. BP have already spent a fortune in cleaning up and stemming the flow without any complaint.

On a related point, the moratorium on drilling is utterly ridiculous. Thousands of these deep water wells have been drilled in the last ten years or so across the world with little or no incident, which proves the current measures are effective in 99.9% of cases. Lessons will be learned and applied from this as they always are, but taking this position is like grounding all airline flights of any kind if a single plane crashes.

However, it really is surprising to see the US government behaving in a manner more akin to the Russians or Venezuelans in this case.

A repeat of the Toyota, it aint an american company, so lets have a field day with them scenario.

The biggest event I can think of is Bhopal, the American company in charge was Union Carbide, now Dow chemicals, has to this day never accepted full liability or responsibility, no dividend withholding and despite an international arrest warrant still outstanding for the then CEO of Union Carbide, he still remains "at large".

Fairs Fair, or not too fair if you happen to be a non US company with a Non US CEO.

I'm afraid BP is right in the headlights. The yanks and the Russians can see it's vulnerable and are going to rip it to pieces in my view.

Dave won't see it until it's too late and he'll be sorry for the pensioners. He will probably call an enquiry but, mark my words, he will do the poodle just like Blair did at a great cost to this country.

BP is trying its level best to plug the leak. They are well aware of the ramifications of the continuing leak!

Obama is just behaving and acting in the manner of a desperate person. It is not his fault that the platform exploded and sank on that fateful April day. However, his actions and comments in recent days are abysmal at best - pathetic even!

Did Americans get so worked up about demanding that Union Carbide pay for the direct and indirect results of Bhopal?

It is time President Obama was reminded that the USA is major oil importer. If he kicks BP out of the USA he should not expect BP to send tankers to the USA with crude oil. Doubtless most of the American moaners about BP all drive gas guzzling SUVs.

I'm sure that if BP were freed of American involvements there are plenty of places in the world it could do business(wonder if Cuba has any offshore oil field it needs help with).

Perhaps our own government should send the USA all the welfare bills the UK had to pick up for the dependants of the Piper Alpha disaster a few decades back.

As for the Special Relationship that was a cornerstone of Mr Hague's foreign policy that looks like a joke. The USA looks a very fair weather friend indeed.

Dear Robert,

Big question here is how much is political capital worth? Obama is playing a strange desperate game. A clear strategy seems to be emerging – when the President feels the heat, he calculates that a rant (sprinkled with real or staged anger) against BP will help. To a certain extent it plays out well to an American audience. I have trolled the blogosphere as well as key US news reports. There seems to be very little if any mention of Transocean or Halliburton or the fact that it was a rig built operated and managed by Americans, albeit via a complex BOT scheme, to the best of my knowledge.

The financial pain will and perhaps already is being felt in Britain – whether we’re taking pension funds or investment trust ISAs. However, I totally agree with you that Obama can’t bash BP and see all of the pain being felt across the pond. Long-term investors are not panicking (yet). If anything, from what I hear in the city, many opine now would be a “good time to buy BP shares” on the cheap. One mute point is that crude oil is trading in the circa of US$71 – 77 a barrel, @$74 plus last time I checked. It is not as if crude is doing sub $10, and the US is the only market BP operates in?

While it’s prudent to mention that no one denies the spill is an appalling tragedy in more ways than one, drilling in the Gulf is crucial for the energy security of the United States. Obama acknowledged just as much in a speech in March prior to this incident. What’s spooking markets momentarily is that both the US President and BP executives sound desperate given the battering they’ve taken in recent weeks. Neither is helping either which is a real shame.

Kind regards,
Gaurav Sharma,
Author,
The Oilholics Synonymous Report
(www.oilholicssynonymous.com)

Robert,

4 blogs on the Gulf of Mexico oil disaster and still no mention of Transocean or Haliburton.

Has Obama mentioned them yet?

#2

"It should be remembered that some of the big bill for all of this is going to land on the mat of US companies, not BP. "

But do they have the cash?

To be completely honest I think the US government, BP and the media have, in focussing on the environmental impact, allowed the human cost of this tragedy to fade into the background. How many people died in the explosion again?

BP will recover, of course they will. They are not too big to fail, they're too experienced, profitable, cash rich and well run (mostly) to fail.

It's the families of the dead who will never recover and I feel this element of the story has not been given sufficient coverage.

I have heard down the grapevine that British troops are ready for an emergency pull out if obama does not stop denegrating the british, He must come to terms with the fact if we pull out so will the rest of the coalition and america will be left on its own to sort afganastan out.
The americans must also realise that BP is not British Petroleum it in an idependant multinational company, and has nothing todo with the british government.
I think the time has come for the british government to tell obama to remove and close the american airbases in this country so that they can be reclaimed by the british armed forces for their use as we could then close our German bases and return to the UK

this stinks

is it not true that America consumes something like 25% of all the oil used each year

is it not true that the Americans signed off the disaster recovery plan submitted by BP just this year that was obviously out of date and inadequate - meaning that it was neither a priority for BP or the American regulator

why at the beginning of this event did the Americans split their minerals management service (MMS) because of an inherent conflict of interest where the same agency inspects oil rigs, probes wrongdoing and enforces safety rules while simultaneously collecting royalties from the companies it oversees. The influence here should be obvious and the motivation to split this agency at this time is deeply suspicious.

is it not true that the Americans in their hunger for domestic oil and energy independence largely driven my their uniquely dysfunctional foreign policy progressively weakened the regulatory infrastructure making an event like this patently inevitable.

it makes Obamas overt anger and his frankly hysterical goading of BP seem to me to be obfuscating Americas own liabilities for this event makes me wonder while they shout ostentatiously loudly at BP, who is shouting for the victims of the Union Carbide Corporation's, Bhopal Gas Tragedy where a leak from the US companies Indian plant of methyl isocyanate (MIC) gas and other toxins resulted in the exposure of over 500,000 people of which there were 3,787 deaths with estimates up to 15,000. Who shouts for them 26 years later Mr Obama.

The more he shouts - the greater his hysteria mounts the more I and others will suspect, rightly, that its not BP who should be blamed simplistically but the profligate and corrupt values of the American political system and its peoples greed for a consumer lifestyle who, it can be seen, really drove the forces that conspired to make this disaster all but inevitable.

Robert

excelent blog as always,

Why oh why is Obama NOT bashing Haliburton, they are as entwined in this disater as BP, whilst I admire the fact that, yes BP are ultimately responsible for their subcontractors, its also fair to apportion blame to those at fault, if the valve had not been faulty and worked this disater would have been confined to the tragic loss of 11 poor souls on the rig.
& now the talk of compensation other oil companies for loss of income smacks of cheap political one upmanship.

I think David Cameron should pull out all the boys and girls from Iraq and Afghanistan and send the US a nice big bill for Britains fiscal contribution to America's two phony wars with a nice compensation package for all killed and wounded added on top.

Its time the UK government started to back up BP !

Before kicking the ass of british , let obama kick the ass of warren anderson who is responsible for the worst industrial disaster in bhopal, india which killed and still killing thousands of people. let obama kick the ass of people who used agent orange in vietnam.... US should preach what it does to others... let obama better learn that...

Sure it is a disaster. BP will end up owing billions (for a US Contractors disaster). Sound familiar? How about Afghanistan. Troops should never have been sent there and we are paying for AMERICAN adventurism. This would not happen if the company were American. I also smell a rat. This is a drama that the Americans are turning into a Crisis. Probably for economic reasons – they want to get big chunks of compensation and advantages for US companies. WE are better off with Europe, rather than the US, which is a long way away and increasingly isolationist.

One wonders how much damage US companies have and continue to do in other countries - including the UK - and walk away as though nothing happened! As BP suffers so do those US investers who hold 39% of BP stock. Let them see what good-for-nothing politicians they've got. If Barack Obama keeps writing out new bills for BP, let some other governments return him the favour - or cut off his raw materials supplies.

Whilst more than happy to see any Big Oil corporation taken to task for a disaster of this scale, the proposal that BP should pay the losses of employees by other (mostly American) oil companies is ridiculous. I'd assume that this means that the American government will now ensure that all American interests/disasters aboard are pursued as vigorously:

a) All environmental and economic disasters caused by oil exploration in the Niger Delta (in particular Exxon) are paid for
b) Historic disasters such as the Amoco Cadix and the Atlantic Empress are revisited and all environmental and contingent costs are paid for
c) The cost of non oil disasters initiated by American owned companies abroad, such as Union Carbide in Bhopal, are revisted and re-evaluated
d) Haliburton, the company responsible for the casing that split (and whose executive is associated with people like Bush, Cheney and Rumsfeld) are pursued just as aggressively.

Caledonian has hit the nail on the head. With the UK and UK troops standing side by side with the USA, President Obama is playing a very dangerous game with public option within the UK and the reason why we should back them. When they, (USA) are attacking the company that UK pensions and US pensions are heavily invested in. This will not only bring further difficultly for Britain and our future but also that of the USA. This has truly shown Obama’s inability to lead a nation and his anti British views in order to improve his image. Leave the USA to stand on it’s own in a war that they brought to our shores. We can stand alone, it is us that have helped insure the dollar in the oil industry, maybe we should help change it to the Euro and crush the dollar for good. Britain is not a nation that can be bullied. Do not try to.

I agree with the comment regarding our troops and also the comment on 5Live this morning regarding US corporation disasters such as Bhopal. I think the problem is that President Obama was seen to be late picking up on the issue and so he must appear to be in the right and blame someone else.
Presumably our new prime minister will need to have a quiet word when he goes to the US about political realities. If he wants Britain's help he should stop knocking BP.

The Jon Stewart show mentioned the Minerals Management Service in yesterday's show. Quite a controversial quango who approve deep sea drilling requests as well as make money from such ventures once they are approved.

9. At 10:42am on 10 Jun 2010, plamski wrote:

"Are you saying that BP is another one of those TOO BIG TO FAIL companies, Robert? I thought we already covered that in our previous lesson?"

plamski too big to fail (TBTF) was soooooo last year - this year it's FTBTF (far too big to fail) - keep up!

Unfortunately the WTBO (willing to bail out) has diminished since last year and is now WBTPTBO (willing, but too poor to bail out)

I suspect if this goes on much longer we'll all be in the FUBAR'd camp - an acronym which reflects the situation aptly (if not familiar it's on wikipedia)

BP is an international company with international pensioners, including US pensioners.

Many Pension funds are 'renowned' in the last decade of failing their pensioners - they don't need another excuse do they?

BP is, and continues to meet obligations, to those directly and indirectly affected by the consequence of this horrendous explosion.

President Obama has made his dedicated concern quite clear and further 'words' that drive down BP share price will not help BP to help those affected?

British pension holders should start a class action against the US government. They have no right to tell BP if they should pay dividends, their actions have distroyed significant value.

'Or to put it another way, in a world of global capitalism, Obama can't punish BP and expect all or even most of the pain to be felt in Britain.'

Especially when Obama conveniently overlooks the contributory negligence of those American interests and players ... like the US federal authorities who must surely have approved of BP's arrangements to drill so deep?

For someone who got elected on agenda of being 'fair' ... Is he living up to expectations? It cannot be surely just be BP to blame here as the President is saying/inferring ... in terms of payments?

Blaming all and sundry and then just looking to BP for payment? How convenient!

Some of the clean up costs/a proportion should be for the US taxpayer to pay?

Do you propose that preserving positive investment conditions for the oil sector in the US is more important that creating positive conditions for environmental respect by oil companies?
You stress the cost to persioners and savers because of the financial sactions being discussed for BP.
Is this to elicit sympathy for BP, and make us feel that our futures are intertwined?
We already know that our financial welfare depends on the welfare of huge multinational companies - is that a good thing?
As it stands, you seem to imply that we should be able to wreak ecological havoc and get away with it lightly, because our pensions depend on it. So to preserve our financial future, we must be free to destroy our future on the planet?
I think you should dwell on the environmental cost that those same people, along with everyone else, will face from the oil spill. And perhaps let societies judge which of the two they would prefer to incur.

I've just been reading analysis covering a different issue in this ....

Where is Lord Snooty ?

If Obama continues with his zenophobic rant and pushes down BP shares/dividends, that has a significant effect on UK pensions.

Surely this is time for, at the minimum, a quiet word about US/UK relations ..... or at worst some hints about our continuing support in the American war in Afghanistan.

So where is Cameron? - too busy sacking Englishmen to have a chat with the Americans?

Has it occurred to the media that the financial pain of BP is of less concern to us than the ecosystem pain of the Gulf of Mexico?

Has it occurred to the mass-produced economists that valuation of Ecosystems has been hugely ignored and that this Gulf of Mexico disaster will be the mainstreaming of Ecosystem Economics?

Has it occurred to the readers that it is getting harder and harder to find intelligent journalism to read on the internet, and that the pay-to-read model soon to be tested by a certain media provider, might actually be a good thing if it raises the standard of journalism?

"you should probably be alarmed that President Obama has been knocking your company about the head."

It's not my company, I don't have a company, and nor does this country. Have we all forgotten what Globalisation means?

Sovereign responsibility no longer exists. BP is no more 'British' than 'british' telecom (who outsource their call centres to India and Africa), British Steel - which is owned by Tata, British Leyland - which was owned by BMW and now is 'owned' by China (well what's left of it)....I could go on but you get the picture.

This is why it's going to be interesting when the American people start burning down BP offices - I certainly won't be standing up in defence of BP on some false pretence of "we're all in this together" and some faux-churchillian nonsense about defending british companies.

Can you see how the media is playing this? The US are playing the same game as us - the good thing about this story is it shows us 'where the battle lines will be drawn'. They will not be between nations - but between citizens, Government and corporations.

The Governments claim to be on the citizens side (but operate against them by bailing out corporations) - but the citizens are vastly the most powerful - only the placating of them by Government keeps this little charade going.

...but the peasants are restless...

Obama is a politician and as such will always give the public a show for there money. In truth BP will continue to do the right thing – payout compensation without complaint.
The drop in the BP share price is short term. In all probability an emotional knee jerk reaction by the yanks to Obama’s rhetoric or the sea life pictures on our TV’s. However, BP share high was 655p in April this year and its 52 week low was 272p. Today it is down to 373p. Its growth forecast this year is 17% and 12% next year. Now I’m not an employee of BP nor am I a share holder, but now because of all the attention it has made me look at the figures. I can now say that I am soon to be a big investor.
Go figure as the yanks would say

14. At 10:53am on 10 Jun 2010, iceland_express wrote:

"It is a fact however that BP's owners have appointed a management team whose actions have caused many many billions of pounds worth of damages to the company's number 1 trading partner. "

Is that this management team - or Lord Brownes legacy?

BP is in a Joint Venture, and has 65% with a US Company, Anadarko, having 25% and Matsui of Japan 10%. Under the terms of the JV agreement all costs must be shared between the Partners to the Venture, and they are jointly liable. To do otherwise would be illegal and effectively wreck all Oil Ventures in future - BP would only be totally liable under select circumstances, predominantly 'Wilful Misconduct' would have to be proved - 'Gross Negligence' does not by itself absolve the other partners of liability.

All penalties imposed upon BP must also be shared pro rata with Anadarko and Matsui.

The way that Obama is going on he must impose the same penalties on Anadarko, headquartered in the Woodlands in Houston. He must also impose penalties pro rata on Matsui.

Two questions -
1. Is Obama prepared to stop Anadarko from paying Dividends, and to possibly send it bankrupt?
2. Is Obama prepared to take on Japan over Matsui?

I think we can guess the answers.

These points are even without taling into account potential liabilities of Halliburton and Transocean.

The US will gain $30bn in fines and compensation at the cost of $4bn lost dividend for one or two years. BP may also be forced to sale its US assets to US oil majors.

I believe that this disaster was a terrible accident. However, if at a later date, there proves to have been negligence (or worse) that led to this disaster then the perpetrators should be called to account and punished appropriately.

In the meantime, I am appalled by the politicisation of this situation which, in my opinion, does not help the efforts to put things right (ie cap, clean-up & compensate) but does highlight the real priorities of some politicians manoeuvring for position. The politically-motivated rhetoric that I am aware of is very unhelpful and sounds grubby, fearful and bullying; I feel it may have a long-lasting and negative effect much wider than the oil leak disaster.

All hydrocarbon exploration activities in the United States of America are licensed and regulated by the US government, presumably including those of BP and its partners in its use of the Deepwater Horizon rig and sub-contracted equipment and services.

I guess what I am wondering is this …... If a hired truck crashes due to brake failure - itself due to negligence by a mechanic - is the truck driver really that much to blame?

With my heartfelt wishes and hopes for a speedy recovery from the Deepwater Horizon disaster.

So is now a good time to get BP shares or not?

I have friends in America like many of us and I am very keen on the country and believe in the benefit of strong Anglo - American relations. I do however think President Obama will regret some of his rhetoric against BP. He is currently coming across as a lightweight President with rather a lot of pontificating - history will be the judge.

Think Obama is treating BP unfairly. I think instead of focusing his efforts on finding out whose 'ass to kick' if he spent that energy and time and his power/influence to get brains and teams together and be constructive on coming up with a solution to overcome this disaster might bring him more popularity (which is why he is raising his voice so much in the first place). By interfering in BP's business in a negative way he is making the situation even worse and diverting BP's efforts from focusing solely on the disaster.

From the comments in your blog it is evident that not many people are happy how he is using his position to influence business decisions and markets (to a greater deal)to ruin a perfectly good company for his political gains - huh, and he talks of having moral obligations!

sure BP must deal with the disaster and is committed to do so and will be paying heavily for it. Obama can deal with BP once the situation is under control rather than throwing more fire on their (BP'S)plate and diverting their focus.

This blog shows what a sick society we live in. We have a company who makes billions of pounds each year in profit. But who cannot provide simple measures to prevent an unmigated disaster and when someone stands up and wants to hold them to account they are abused and ridiculed. How can you watch the videos of the destruction of the coastline, the birds dying in pain and agony, in their thousands, covered in oil and then stand back and discuss the rights and wrongs of the treatment of the perpetrators of this ‘crime’?

22. At 11:05am on 10 Jun 2010, cienzod

Protectionism is back in fashion - it's just like 1932 all over again!

“It is a paradox that the current oil spill in the Mexican Gulf is attracting so much outcry from the American public and leadership but an American oil company is doing worse damage and poisoning the lives of hundreds of millions of Nigerians who depend on fish as the cheapest source of protein and nobody is talking about it,”

https://saharareporters.com/real-news/sr-headlines/6244-exxonmobil-oil-spill-in-niger-delta-exposes-nigerians-to-poisoned-fish.html

I hope the White House reads Robert Preston's comments and President Obama stops throwing tantrums like a toddler in a supermarket. It is one thing to be "furious" about the situation but what he needs to do is to support BP in its efforts and reassure Americans that everything is being done that can be done. Destroying BP will not help anyone.

24. At 11:09am on 10 Jun 2010, Ben Granger

The answer to all your questions is...

"because the US is run by the corporate giants - which include the oil giants"

They are determined to keep us using oil based products and oil run transport so they can profit from the scarcity they create. It's been said before that value is subjective - so by playing with the 'subjects' you can ensure everyone pays through the nose - buying you a nice mansion, yacht or maybe a small island somewhere.

We could have moved the world off fossil fuels 10 years ago - but those with vested interests ensured that the 'price' of this would be far, far higher than the 'cost' of continuing the current energy regime (of course the corporate world doesn't understand social costs like environmental damage or the holding back of the development of humanity - there's no spot for it on their balance sheets)

Basically our lives have been engineered to ensure that:
a) We all have a chip in the game through our pensions in an effort to align our goals with that of corporations
b) We continue to use outdated products and methods so the owners can profit at our expense.

Well done Obama
I'm waiting for the BP share price to drop a little more - then I'll buy - lots

...oh and someone should point out to Obama that the US refused help to clean up the spill

https://www.marketoracle.co.uk/Article20164.html

You see that those protectionist policies always come back to bite you (the Jones Act).

What do you mean you didn't realise? The US has been talking 'anti-protectionism' whilst blatantly playing protectionist for years now (this act was from 1920).

The world of lies is collapsing - the truth is starting to shine through and blind the 'pinky eyed' rats who run our countries and corporations.

I'm puzzled. President Obama is very good at motivating people, so why the negative attitude to BP?

Most presidents like to 'galvanise' their nations resources to 'solve problems' or to 'rise to the challenge' so why not this one?

Only have to look at past achievements - they managed to turn around ships for the Atlantic supply convoys in World War 2 in less than 7 days a piece, in many shipyards. We'd have all starved in Europe without them, so why can't Mr Obama motivate his engineering resources to put a 'box' over the top in the last 45 days.
Seems strange Mr Obama is failing to notice - any US representatives care to comment?
Its not the first environmental mishap in the US.

One can't help but wonder if there are 'interests', maybe Halliburton (one of the sub-contractors involved in the busted blowout device) who are investing huge sums in a negative US MEDIA campaign against BP, perhaps in preparation for the legal battles ahead.

So maybe Mr Obama is protecting his back, but it will either backfire or 'blowout'.

Petrochem Engineering resources from both BP and the USA should be working together here.

Looks like the Americans can 'talk the talk', but have lost their ability to 'walk the walk'.

I hope the British Goverment has a careful look at Haliburton and Trans Ocean before allowing these dangerous and useless companies any further work in British or EU controlled areas.

So, whatever happened to USA belief "in god we trust" as written on their money.

Is this a ploy to undermine BP and for USA investors to buy it up cheaply.

By damaging BP in such a way USA is actually damaging BPs ability to pay for growing costs

11. At 10:46am on 10 Jun 2010, writingsonthewall wrote:

Well said.

Lots of posts about the American companies that are up to their necks in it too.

Aye,
American companies are just as good at risk management.
American legislation is so full of holes it wouldn't catch a sperm whale.

Still, just because lemmings head for the cliff, is that any reason to follow?

I have to say that to find out how dependent we are on BP's dividends for the value of our pensions is a very poor reflection on the extent to which our "industrial spread" has narrowed over the years as we've sold off or shut down so many major UK companies.

That said, it also needs to be understood that BP is in no sense a UK national champion. Sadly, nowadays it prefers to fund important R&D programmes in the USA rather than the UK and unlike most American or other overseas oil/gas companies it tends not to support indigenous suppliers.

The idea therefore that BP is deserving of our support simply because it is a British company is risible. However, BP does deserve our support because of the pension issue and of course because it still employs a very large number of UK personnel but lets not enter into a flag waving exercise because BP certainly wouldn't and if it tries to make one happen then it had better be prepared to demonstrate its own patriotism for a change.

Just to remind you all who accurately point out union carbide as something that sticks in your gullet.

...well now you know the true reality of the world - America does what America wants and the rest have to put up with it. It's been that way for a long time - it's just previously we were always 'hanging on the coat tails' so we didn't notice. Now that American attitude has turned on us.

...and you wonder why the Iranians want nuclear weapons so badly....

We can pass sanctions against possible destruction (nuclear) but we can't pass sanctions against actual destruction (oil).

As no other oil company has come forward and said that they can fix this leak, one would have to assume that none of them can. If that is the case, what are they doing drilling at these depths?

Just showing my support for BP. Fight your corner as much as you can against the americans, as remember this was not enitrely their fault.

Too much jumping on the bandwagon from the americans, who are failing to account for their own failings in this matter.

49. At 11:30am on 10 Jun 2010, Thor God Of Thunder wrote:

"I think David Cameron should pull out all the boys and girls from Iraq and Afghanistan and send the US a nice big bill for Britains fiscal contribution to America's two phony wars with a nice compensation package for all killed and wounded added on top."

The day a weakling like Cameron stands up to the world's bully (in political terms) is the day they 'fix' Capitalism - or hell freezes over, both are just as likely.

This BP event will show you all exactly what you have 'kind of' elected.

US companies have caused untold misery across the world but that is no way to defend the failure of BP!

Aren't the bosses at BP well enough educated to know better and paid enough for it? Just like the bankers, the less they bothered to do things properly, the better in terms of getting that product out to customers and therefore better for the short-term profits.

It is simply down to greed - hence all this talk about reducing government is nonsense. Regulation will not prevent every disaster, but it will seriously reduce the number and possibly the effects if good regulations are strongly enforced. And that requires government.

Didn't even have an emergency fund! Dearie me - we all know we need to have savings because the insurance company will wriggle out of paying the bills when we get too sick to work and the welfare state, the safety net won't help you out as much as you need it, when you need it. Unless of course, you are a too-big-to-fail business. The welfare to work victims will no doubt have to clean up the mess for their food stamps and BP will continue as before.

My my....if you think the hypocrisy in the BP story is bad - this one just ooozes it everywhere.

https://news.bbc.co.uk/1/hi/business/10283137.stm

Very generous Mr Walsh, refusing your 300k bonus on top of your 700k salary whilst telling your staff how 'cuts are essential to keep the airline flying'.

You couldn't make it up.

It's a similar story down at BT - exec takes his big fat wages and the blue collar workers are expected to take a pay cut (a 2% rise in a 2.7% inflationary environment is a .7% cut)

The pigs cannot help filling their faces at the trough - soon they will have eaten everything and we must then eat them.

"By the way, if you're a Brit saving for a pension, you're probably, indirectly, a BP owner."

Presumably this implies that pension fund managers are all idiots and sat on BP shares during the last couple of months then? If they did, then I also presume they must all be failed school leavers aged 16-17 being paid minimum wage to have done so.

You have to wonder if the US administrations reaction would have been the same if the company in question had been an 'All American' oil company. The boards of which must all have sat there when the leak started and thought 'there but for the grace of god' and all that.
Much of the drilling would not have been there, but for the insatiable appetite for oil in the US - so President Obama should also perhaps take a look at how the US has a hand in the origins of the disaster rather than concentrate so much on apportioning blame.

53. At 11:33am on 10 Jun 2010, Jeff Denham

The demand for pay is a way for the US to keep their welfare bill down.

11. At 10:46am on 10 Jun 2010, writingsonthewall wrote:
"By the way, if you're a Brit saving for a pension, you're probably, indirectly, a BP owner. So as Boris Johnson, the Mayor of London, implied this morning on the Today programme, you should probably be alarmed that President Obama has been knocking your company about the head."

The day anyone should listen to Boris Johnson is the day we should switch the lights off in Britain and shut it down completely.
--------------------------------------------------------------
A LOL moment. Nice to have a chance to agree with you on something for a change, WotW!

40. At 11:23am on 10 Jun 2010, DevilsintheDetail wrote:

"Dave won't see it until it's too late and he'll be sorry for the pensioners. He will probably call an enquiry but, mark my words, he will do the poodle just like Blair did at a great cost to this country."

That's right, the people wanted 'change' - but they voted for 'Blair II'

Well done voters - hope he makes you proud.

I am so glad I did not participate in voting for a candidate - I can absolve myself of responsibility!

BP said very early on that they were responsible for stopping the leak and for cleaning up the mess. They are doing their very best to make good on that commitment.

The constant attacks on BP by Obama and his anti-British rhetoric are not helping the situation. What more can BP do? Obama appears hell bent on destroying BP so that US oil companies can pick-up BP's US assets on the cheap.

I was very excited at Obama becoming President and I think up to now do he has done well. However his reaction to BP is dreadful, I'd hope that if this situation was reversed the UK government would support and wait for the full facts before jumping to conclusions. However American politics appears very negative and agressive, the statement 'kick them when they are down' is perfect.

The President, Senators and US press are winding up the American people and it will come back to bite them.

Will BP get an apology from the US when it turns out the issue lies with Transocean and Haliburton?

62. At 11:44am on 10 Jun 2010, jon112uk wrote:

"So where is Cameron? - too busy sacking Englishmen to have a chat with the Americans?"

no - too busy appointing ex-BP CEO's to come and work for him I suspect....

https://www.thisislondon.co.uk/standard-business/article-23842428-city-spy-what-a-makeover-for-lord-browne.do

p.s. - please note the part about BP 'manipulating the web' - and come back and tell me if you're comfortable knowing that corporations are quite happy to manipulate the truth in order to protect themselves.....

It is clear to me that there is serious anti-British sentiment in the US administration.

Obama is not stupid he does not refer to BP as "British Petroleum" by accident.

I see US govt has now said we should start negotiations to hand over the Falkland Islands to Argentina. Presumeably little details such as the Falkland Islanders own wishes and democracy are of little relevance to Obama.


Well I have various suggestions as to what we should do:

1. BP should say that they will not pay a penny (or cent more) in clean up costs and compensation.

2. All US bases on UK territories should be given one month to pack up their bags and leave.

3. Govt depts should be told that they can only but American goods and services if there are no alternatives from anywhere else in the world

4. The US/UK extradition treaty should be torn up.

5. US gets told that all British troops will leave Afghanistan and Iraq in the next 6 months.

If our friends want to spend all their time telling the world that we are doing things wrong then you are not our friends.

62. At 11:44am on 10 Jun 2010, jon112uk wrote:
So where is Cameron? - too busy sacking Englishmen to have a chat with the Americans?

The Welsh will be giving a big sigh of relief when they hear that!