I see no sign of BP hiding from its responsibilities but see every sign of a company struggling to find a solution in incredibly difficult circumstances. A bit of recognition of that from Obama wouldn't go amiss. Instead of coming out with anti British and anti oil company sentiment and pandering to populism, Obama should roll up his sleeves and give BP his and his government's support in the clear up operation.
A friend of mine in Washington, Daniel Forrester has some interesting comments and questions for me and for you, dear reader...
It's striking that you have not mentioned the BP oil spill on your blog. This event in the US has solidified new perceptions of Obama that will dog him for years to come. In addition, this will reset the rules for so many things that have been ignored for years. We might as well be on the moon as we try to do this. This is man on the very edge of the technology he so proudly deploys. Shocking events like this are coming at us now - from derivatives with no transparency to oil spills. No country is immune from such low probability but high consequence events. World leaders better get good at thinking through the downside of things as rosy forecasts on issues like sovereign debt will prove fatal. The shocks will continue to come; its the way the world works now. No cyclical answers to massive systemic problems.
So many questions:
What, if anything, does this mean for UK and American relations as BP Global has its heritage based on the UK even though its the US arm that owns the spill?
What would Cameron do if faced with such a moment?
What should BP do that they have not? Can they be trusted?
What would it mean for the coalition in terms of rules, regulations and energy policy if this happened off the coast of Scotland, let's say? Would it break the coalition up? Could it break apart more than that?
What say you and your wise readers as this event is live with no end in sight. I can't begin to tell you how sad this makes me and so many Americans. An entire region will never be the same in my lifetime - if ever.
Of course BP must take responsibility for what has happened, but I see no sign of them shrinking from that. But disasters like this are always possible no matter what measures are in place to prevent them, and politicians need to recognise that, as well as ensuring that proper investigations take place to establish what happened and why.
And isn't it interesting how Obama constantly refers to the company as "British Petroleum", a name it hasn't used for decades. Why would he do that, I wonder. I think we know.
BP is not blameless in this disaster. How could it be? Mistakes were clearly made. But let's assess those mistakes on the basis of what actually happened rather than the fact that BP is, wait for it, "foreign".
I used to think Barack Obama was a different sort of politician. I now realise I was wrong. He's just as much of a brazen populist as the last Democrat in the White House, Bill Clinton.
Well, I cast my mind back to the Bhopal tragedy. That was infinitely worse, as it involved a substantially greater loss of life in addition to the local environmental destruction. Although a financial settlement was made, the company - and America - washed its hands of the whole affair, with very little effort being made to ensure that those harmed were actually helped.
ReplyDeleteCompare that to BP's apparent intentions today, where they seem to be making a real effort to deal with the immediate problem - the gushing oil - and accepting responsibility for helping as best they can those harmed by the damage, even while the cause and responsibility for the disaster haven't been fully determined. I'm very proud of the company that I'm a part owner of.
And I agree with you, Iain. I'm absolutely disgusted by Obama's populism. He's abandoned his grand speechmaking and is now merely scraping the barrel of naked rabble-rousing. America is a country that already doesn't have many friends in the world. It's absurd for him to treat his greatest ally this way, and particularly stupid given Americans' undying addiction to oil. In a year's time, will Americans who live inland thank him for their pricier oil?
Excellent post, Iain. I'd been trying to work out how to express the same sentiments. I'd like to think that, if faced with an oil spill by a US-owned company in British waters, Cameron wouldn't be given to such histrionic fits of pique.
ReplyDeleteI totally agree with you Iain, and was considering putting up a similar blog post - but you beat me to it!!
ReplyDeleteI am waiting for someone to compare the reaction of the US Government with that of HMG after Piper Alpha
ReplyDeleteObama is the wrong man at the wrong time with the wrong politics. That is the one flaw with democracies voters are turkeys who always vote for Christmas.
ReplyDeleteAmerica has a noble tradition of cleaning up its pollution: Union Carbide springs to mind. Not to forget the World Financial Crisis that what caused by activists like Obama demanding easy house mortgages by playing the race card. We'll be cleaning that mess up for generations.
ReplyDelete'I used to think Barack Obama was a different sort of politician. I now realise I was wrong. He's just as much of a brazen populist as the last Democrat in the White House, Bill Clinton'
ReplyDeleteNo Iain, Obama is much worse than Clinton. Clinton was at least smart enough to know when to attack and when to ploy the diplomat. Obama is just Blair US style. He was nothing more than a blank canvas upon which the US public could paint any image they chose. He has no real skills outside being a media personality, no understanding of history, and is the most anti British president since Truman. For the British, he is a disaster, for the US he is even worse. He will be very lucky to get a second term and will be remembered in the same way as Jimmy Carter.
Agree very much with what you are saying Iain. The way in which Obama is hyper-critical of BP & insists on referring to it as 'British Petroleum' is shameless populism & an encouragement of zenophobia.
ReplyDeleteGiven that we are where we are, I don't see what more BP could possibly have done to stem the flow of oil.
Well written iain. Obama sickens me. As the editorial in the Daily Mail points out today Obama keeps calling it BRITISH PETROLOEUM a name we never use these days, although rightly it started here.
ReplyDeleteObama conveniently forgets that although owned by BP the rig was being operated by American companies!!
Obama, in his book, shows his hatred for this country when he states, without any evidence, that his grandfather, or was it his caring father, was allegedly tortured by the British troops fighting the Mau Mau in kenya.
As Vulture points out elsewhere Obama's first action as President was to send the bust of Winston Churchill back to the British Embassy from the White House.
Obama. A true friend of Britain? Rubbish. We should draw a line under this 'special relationship' and alongwith Canada and Sweden bring our troops home today.
You're only looking at this from a British-centric point of view. What you're missing is the sheer amount of pressure that Obama is under in America.
ReplyDeleteRead Mark Mardell's blog post today on exactly the same subject. It strikes a very different tone to yours.
http://www.bbc.co.uk/blogs/thereporters/markmardell/2010/06/of_obama_and_of_hamlet.html
Well, of course Obama is a socialist and so has to exploit the negative aspect to his advantage. He doesn't really seem interested in America or the environment. A bit like the lot we had for 13 years.
ReplyDeleteI have not seen any sign of a positive reaction from him. Does America know nothing about oil wells? Hardly.
Have any US companies offered BP assistance in this area? Has the US government? If you are a socialist, isn't this a golden opportunity to show what the State can do compared to evil capitalism?
Obama populist, surely not!
ReplyDeleteHe is not a new type of politician, just one who avoided the sh*t for longer than most.
And now he is in it [being a Socialist, almost everything he has done has failed], he is looking around for someone else to blame, just like the rest of us!
Incidentally, if it had been an Exxon rig and BP had come up with a miraculous solution, do you think any of us would not be calling it BRITISH Petroleum?
I can't find any examples of anti-British sentiment from Barack Obama. I think it's a remarkable work of spin to equate fair criticism of BP with blanket "anti-Britishness". As a Brit, I say that BP does not represent me or my country.
ReplyDeleteI wonder if this new narrative is being pushed by BP's PR team?
He constantly refers to the company as "BRitish Petroleum", which hasn't been its name for decades. Why would he do that? Ask yourself.
ReplyDeleteAnd just for the record I haven't seen anything from BP's PR department let alone spoken to them before the conspiracy theorists get going.
It's not just Obama though, US politicians from all (well, both) sides are jumping on the populist bash BP bandwagon.
ReplyDeleteThe politicians I find particularly irritating are those calling on BP not to pay dividends or to have their US assets frozen. As you rightly point out, BP isn't shirking from its responsibilities. It has repeatedly said it will pay the full clean-up bill. Beyond that it's up to the board of BP and them alone to decide what they do with the rest of their profits.
@Andy:
ReplyDeleteYes, Obama is under pressure from all sides. That's what the job entails. He has to show compassion and empathy for those whose livelihoods have been destroyed - but that's not the same as criticising those who are getting on with fixing the problems.
It is, quite frankly, poor leadership. Kouzes and Posner (2002) identified five key traits for leaders. Apportioning blame for past mistakes, barracking those who are taking action, and making threats are not in the list. Funny, that.
As the saying goes, "if you're not part of the solution, you're part of the problem". Stop being part of the problem, Mr. Obama.
Barack Obama's opponents frequently criticise him for not doing enough; I think those comments are more populist than anything he has said. What do they expect him to do, dive down and stop the spill personally?
ReplyDeleteOf course this sort of thing has happened in the North Sea, on rigs owned by US companies.
ReplyDeleteSee Ekofisk Bravo (Phillips 1977), Piper Alpha (Occidental 1988), Ocean Odyssey (Arco 1988).
The case with Ocean Odyssey shares a number of common factors with current events. ( I can remember talking to a lawyer involved in the inquiry in Edinburgh who told me how the US company got its executives out of the UK to avoid having to appear for the inquiry. )
Of course the difference is the water depth ( generally less than 150m - the US well is at over 1.25km water depth !) - BP will doing doing everything possible to stop the current disaster - if only based on self interest, though I think you'll find their technical people will be very motivated to put things right.
If this had happened in the North Sea or the shallower areas West of Scotland it would already have been dealt thanks to at shallower water depths.
The US govt problem is that its regulatory regime looks like its the underlying cause of this event. They didn't take the opportunity of learning lessons fro other country's disasters ( like Piper Alpha - which changed the UK safety regime offshore ).
This is of course Obama's real objective - to avoid blame. The fact that its fits into his anti-British fantasies is just a bonus.
Apart from the pressure on Obama to be seen to do something, the real issue here is money.
ReplyDeleteBP has actually been spending lots of money helping clear up the mess. In America, this is seen as an admission of guilt.
The accident was caused by the American company which owned and operated the rig. The problem is the company is too small to pay for the damage, so they look around for someone who does, which is why they talk about how BP made 6 billion in profits.
There is a cultural difference between the Americans and the British. In the UK, if two people bump into each other on the street you are likely to get both people saying sorry, even if one person was clearly at fault. This is considered good manners. In America you would get both people shouting at each other, because to say sorry is seen as admitting responsibility.
The US government just sent a big bill to BP to start paying government costs for the cleanup. I think a lot of the Obama retoric is about pinning the blame on BP to make them pay up.
I understand people in the US are upset. But lets put this in context
ReplyDeleteUnion Carbide Corporation (Union Carbide) one of the largest chemical and polymer companies in the United States. Around midnight on the intervening night of December 2–3, 1984, the plant in Bhopal, India released methyl isocyanate (MIC) gas and other toxins, resulting in the exposure of over 500,000 people. Estimates vary on the death toll. The official immediate death toll was 2,259 and the government of Madhya Pradesh has confirmed a total of 3,787 deaths related to the gas release.
It is estimated that 20,000 have died since the accident from gas-related diseases. Another 100,000 to 200,000 people are estimated to have permanent injuries
cleaning up the plant and its environs of hundreds of tonnes of toxic waste, which has been left untouched. Environmentalists have warned that the waste is a potential minefield in the heart of the city, and the resulting contamination may lead to decades of slow poisoning, and diseases affecting the nervous system, liver and kidneys in humans. International Campaign for Justice in Bhopal, claim that "several internal studies" by the corporation, which evidenced "severe contamination", were not made public;
A quick search on the Google News archive shows that BP has consistently been called British Petroleum for decades:
ReplyDeleteLink to Google News Archive search for "British Petroleum"
It's a stretch to use that as your only evidence of anti-British sentiment.
I never thought you did had any contact with BP's PR - you're just repeating what's been written in The Telegraph. But it's hardly a conspiracy to think that a huge company like BP would use PR to try and salvage a negative story in any way they can! That includes making it a question of national pride and dragging British pensions into it.
the real question to come out of your post Iain is WHY did you once think Obama was any different?
ReplyDeleteyou work in the media, so should be better placed than most to see through shallow political branding.
obama is a machine politician from the most corrupt city in the most corrupt state in the US.
he has NO track record of achievement in public life. his voting history was 100% in line with official democrat policy on almost all areas.
he is incoherent without (two!) autocues.
his deepest expressed politicla thought is 'yes we can'.....a veritable bentham or rousseau.
You should take a lesson from this.....look beyond the focus groups, spin and racial branding......the subliminal message of the whole campaign was ....he is black therefore he MUST be different from all those dishonest white politicians.
it turns out he is different....he is devoid of ideas on a scale that makes bush look like aristotle, and so bereft of experience that faced with an enormous problem beyond his control he first announced 'i'm in charge' and is now reduced to squeaking about how angry he is in between golf rounds.
thank god there is nothing serious on the horizon like collapsing world currencies, pan global civil unrest or all out middle east war over nuclear proliferation.........
Well done Iain for visiting this major story on your Blog, I believe the British people are just beginning to realise the consequences of Obama and his cabal of radicals in the white house.
ReplyDeleteObama is basically a community Organiser who was elevated above his natural abilities to the office of President of the US, because of positive discrimination. He is the first Marxist in the White House & is surrounded by a cabal of ultra-left wing ideologues, and backers who share the same philosophy. He spent 20 years attending a radical church but claims never to have heard a radical sermon.
He has a hatred of Britain built upon his family history he even claims British soldiers tortured his grandfather in the Mau Mau uprising in Kenya. His first act was to send back the bust of Churchill a hero in our country and the US and closely tied to the US through his Mother.
He should be reminded of the tragic Piper Alpha Rig disaster in 1988 and learn from the way the Thatcher government responded and read up on the Cullen report. Destroying BP is the name of the game here, they have even been calls to grab the assets.>an act of war< and to cancel the dividend payments. On CNBC yesterday normally intelligent commentators on the financial market were caught up in slogan and bashing saying how can they pay retirees their pensions when the locals on the Gulf are struggling.
BP pays to all our UK pension pots £1 in every £7 it is a massive problem for us in these times of financial hardship for the new coalition.
I believe we are in a very dangerous time where through the American financial cancer >sub-prime< a US government inspired problem of lending to the poorer communities for house purchases, again positive discrimination, it was obvious to anyone these people just never had a chance to make the monthly re-payments a great crime was enacted upon the capital markets and Europe took the hit, a massive hit. Did our politicians want to fine US banks, US ratings agencies, the answer is no, the nearest anyone got to a negative comment was Brown trying to disguise his own failings when he stated it started in America There was no calls for boycotts, grabbing Goldman Sachs assets.
This episode will be seen on film within the next few years, with BP and British marked out as big villains of the peace, it is what America does, every villain or professor is British an English Toff. Why because America is in awe of the UK, it is an inferiority complex that actually worked in both countries favour in the past as Americans pushed the boundaries to show they too could be a great nation. Unfortunately with Obama in charge they have fallen backwards at an alarming rate. We are in a danger zone where those underlying historic traits that forged a common bond and excellence in breaking new boundaries, will come and visit us with war between the allies.
I have written a financial piece that is beginning to get traction on the re-establishment of the sterling area, where we utilise the commonwealth and allow Germany and Northern Euro countries the chance to peg to sterling for free unfettered trade. Just think of a real trade bloc with a common language, common legal system, with resources rich Canada, Australia and a market of nearly 2 billion being driven with Oil from Norway and the UK >Falkland strike 60bn bbl. possible< we could become a major competitor to the US.
Special relationships need special people and the leaders need to be special, unfortunately Obama falls well short.
Just to agree with Demontrout.
ReplyDeleteIt IS British Petroleum (now abbreviated to BP). It IS British Telephone, then British Telecom (now abbreviated to BT).
Most people aren't fooled by these name changes. I'm surprised that you as a Tory want to play down that the B stands for British.
Several thoughts:
ReplyDelete1. I hadn't noticed President Obama using "British Petroleum" instead of "BP". I haven't noticed a strong connection made here between BP and the UK, other than one demonstration in New Orleans where a Union Jack was burned. I think there is still too much felt connection between the US and the UK (of which I am an example), both from shared heritage and Tony Blair's support of the US--I know it sticks in UK craws, but don't ever underestimate its effect with American public generally. As a general rule, we see you as at best cousins and at worst close friends who we give a level of emotional trust and support to reflexively. If BP were associated with any other country, I think it would be strongly tied to that country in the public eye. For myself, I've not been particularly inclined to tie multinationals to their historical country for some time now.
2. I do think BP is trying everything it knows how to do to stop the leak. The problem I see is that no one made BP (or anyone else for that matter) really work out what it would do if a disaster like this happened. Companies aren't going to voluntarily spend a pile of money on something like that unless they're made to do so. That failure is a governance failure by by several administrations and Congresses enthralled by the notion that Government is inherently evil and must not be allowed to get in the way of business. Now it may turn out that BP and its partners did some foolish things before the explosion.
3. Having said that, Tony Hayward needs a media relations handler. I'm not going to jump too harshly on his "I wan't my life back" line as we've all let loose some sillinesses in our lives. But don't underestimate the negative reaction if BP does the business as usual and posts its normal dividend as if nothing big is going on. It will be seen as a sign that BP doesn't see this as a catastrophic event. In that event, don't rule out some strong Government action against BP, such as barring them from Government contracts and voiding existing drilling leases. There will even be some talk of expropriation or receivership over BP's US assets. Those dividends might be very expensive.
4. I don't know that President Obama is anti-British. To some extent, he may not feel the instinctive ties many of us have to the UK, but he is a cerebral pragmatist. If he has any resentment of the British in Africa, I don't see him letting that get in his way. His cool, cerebral nature is now in fact an issue as the Republicans are arguing he isn't visibly angry enough!
Sorry about the length of this.
One of your best posts Iain.
ReplyDeleteDo have a read of this...
http://wattsupwiththat.com/2010/06/01/the-chasm-between-apollo-and-the-gulf/
Written by Apollo 17 astronaut and geologist Dr. H. Harrison Schmitt.
/Quote/
"Whatever may be the culpability of British Petroleum and its federal regulators in causing and dealing with the accident, it has been left to BP engineers and managers and to Gulf State officials to respond as best they can in a regulatory environment that is politically charged, incompetent, fearful and hesitant.
Absolutely no reason exists to assume that any part of the Federal Government has engineering expertise comparable to the petroleum industry that can be applied to this or any future energy-related crisis. Certainly, White House Chief of Staff Rahm Emanuel, Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, and Energy Secretary Steven Chu have no more experience in these matters than does the President.
Salazar’s empty threat to “push BP out of the way” has no basis as a realistic option and best illustrates the floundering of the Obama Administration. Indeed, from “day one,” the expertise of the entire U.S. and British drilling and production industry should have been mobilized to combat this spill, with a single experienced engineering manager in charge. It still is not too late to start doing it right."
/Unquote/
Obama is showing himself up as weak and ineffectual. He's playing a xenophobic card on this one while ignoring that the two companies operating the rig were US firms
ReplyDelete@Demontrout:
ReplyDeleteBP was never called "British Petroleum" even when that was the name of the company - it's too much of a mouthful. Here's a BP ad from 1922 to prove it.
It's not even the name of the company now since, as those news stories you linked to show, it merged with Amoco and bought Arco and is now a huge multinational. BAES is not "British Aerospace" for the same reasons - more than 50% of its income comes from the US.
To emphasise the archaic, longhand form of the company name serves only one purpose: to create an international incident and deflect the blame from the fact that a US well run by US companies in line with US regulation exploded and its foreign owners are stuck with the consequences.
Much as I too regret Obama's populism I certainly think his hand has been forced by the American media. See this from Mark Mardell:
ReplyDelete"watching President Obama's performance over the last few weeks I can't help feeling his heart isn't really in it.
Americans living along the Gulf of Mexico feel pummelled, upset and furious and the media here are insistent their commander-in-chief holds up a mirror to their emotions. As I watch this theatre unfold a scene from a play keeps popping into my head.
The presidential sternness seems forced - he appears relieved when he can take refuge in wonkish detail of blowout preventers, marine risers and other underwater arcana."
http://www.bbc.co.uk/blogs/thereporters/markmardell/2010/06/of_obama_and_of_hamlet.html
Obama is a calm, measured (and of course supremely talented) politician and president, and the fact that he has been forced to reluctantly adopt this angry rhetoric should provoke criticism of the temperamental American political-media environment, rather than of the Obama administration.
Iain
ReplyDeleteBest to avoid ponderous blogs on subjects about which you know nothing.
My own take, as an ex Oil Company Exec. of 37 years is here:
http://www.roadsideretail.com/2010/05/reputation-management.html
I wonder if your reaction would be the same if the oil spill had been off Norfolk and the oil company had been American?
ReplyDeleteWould you be criticising David Cameron for being too hard on the poor old oil company?
I think not.
I am in the USA currently and am watching the TV full of people blaming BP. Clearly the technical problems are huge and BP have a very difficult task on there hands. What no one questions is why are companies drilling for oil out at sea. I have heard no one ask the question how do we use less petrol or use smaller cars. The roads are packed with huge gas gusslers and to use a worn our phrase "they just don't get it". I am not a green fanatic but we have to do something to move away from oil.
ReplyDeletePS. Petrol is $2.59 a gallon currently.
Agree with Strapworld: If and when the two American contractors operating the Rig are found to be at fault, how is Obama going to re-act when BP counter claim against them?
ReplyDeleteHarry
I have some Indian relatives who worked with Union Carbide before the accident. They say that Union Carbide knew the problems and did not care as it thought that Indian lives were cheap, and the third world country should be haapy to get this plant. Americans behaved disgracefully. Now it is the holier than thou attitude. Instead of critcising BP Obama and the high tech industries should work with BP to plug this oil flow. After all, Americans boast they have the technology. It appears that Obama and the Americans want to crush BP whatever the BP does which is million-times better than how Union Carbide behaved. There is another pressure coming to Obama in the form of Bobby Jindal who is the Republican governor of Lousiana and has presidential ambitions of his own. Obama is playing political games.
ReplyDeleteBP are licensed for Exploration purposes in that part of the Gulf of Mexico. If they strike oil, and they certainly did here, they would have to apply for a license to install the production facilities which would probably be a sub-sea completion linked to a floating production unit a la BP Schiehallion off NW Scotland.
ReplyDeleteThey sub-contracted the drilling of this well to Reading & Bates, a US drilling company whose semi-sub was fitted with Cameron Blow-Out Preventers. Cameron is also a US company.
I'm not sure quite why BP is getting all the flak for the blow out unless they leaned on the drilling contractor to do something which wasn't quite kosher.
I guess it will all come out in the wash, but Obama never seems to mention in his criticisms any of the US companies involved.
Obama's stance seems to be several-fold:
ReplyDelete* Get BP to pay for clean-up/restoration of states affected, given the US's and its states' finance black holes;
* Populism - bashing corporations;
* Excuse to clamp down on oil usage;
* Effort to create synthetic scarcity of oil and thus, boost oil prices significantly;
* Effort to ban all off-shore drilling;
* Move towards nationalising oil companies.
The man is a socialist/corporatist, who is deeply unpopular and who faces a hiding in the November elections. He has a packed agenda to fulfil, before he is packed off to work for one of his donor corporations after his electoral armageddon.
"I used to think Barack Obama was a different sort of politician ..."
ReplyDeleteHe is. We have had brazen, craven, deluded, unlucky, misguided politicians before, but they were usually to some degree energetic and competent. Obama is all those combined with lazy and incompetent. The media used to attack Bush 2 for his holidays and golf. Obama has more holidays and much more golf.
Private Eye used to have a little column: "Things to do with John Major", such as draft stopper, dog anchor, drain blocker. Would a magazine, even one as scurrilous as the Eye, have such a go at the Big O? I hope so, and I hope the deluded pundits on the BBC (Essler, Schama, Humphrys)are furious about it.
Haha. The right kept saying he didn't look angry about it. So now he is looking angry, according to the right he is just sounding off!
ReplyDeleteBP are fully to blame for what has happened and have quite a track record in the US for this type of conduct, so it's understandable that US opinion is running hot against them - the identification as a foreign company is merely convenient and doubtless their stock is owned globally as with all the oil multinationals.
@Hamish:
ReplyDeleteNo, it really isn't.
BP PLC (formerly BP Amoco PLC, formerly British Petroleum, formerly the Anglo-Persian Oil Company) has neither the word "British" nor "Petroleum" in its name.
BT Group PLC (formerly British Telecommunications PLC, formerly a division of the GPO, formerly several separate companies dating back to the Electric Telegraph Company) has neither the word "British" nor "Telecom(munications)" in its name.
Check the stock exchanges. Check Companies House. Check the companies' own websites. Check wikipedia.
You're flat-out wrong here.
@Paul Davison:
ReplyDelete"Those dividends might be very expensive."
Particularly for the US. This is, to recap, profits from the previous year, on which tax has been paid. And the government is trying to argue that somehow it still has a claim on the money.
Does the US really want to send the message to the world that they can, and will, change corporate law on a politician's whim? Is that what a good business environment looks like? Or is it the sort of thing that makes companies pull out of "emerging markets" and run for cover?
BP has to pay the dividends for one very simple reason: if they do not, the executives are in breach of their fiduciary duties and would be open to lawsuits for not acting in the shareholders' interests. Especially given the threats to confiscate assets - that's all the more reason to take the money out rather than sitting on a fat pile of cash.
Of course, if they were forced to hold on to the money, they'd have to invest it somehow to preserve shareholder value. I wonder how big a splash shorting T-bills or the US dollar to the tune of $10bn would make... Big enough to move markets? It's the sort of scale that LTCM and Lehman Bros were working at.
@The King of Wrong
ReplyDeleteI cannot see any circumstance where BP cannot pay the dividend.
What they should do is create a fund and put in it new issued shares around $5billion worth and give them to the American claimants, locked up for 5-years.
Also technically this would not admit guilt and counter claims could be issued as and when necessary.
This creates a fighting fund, gets the American claimants on side, they would hardly mess around being anti BP when they have money depending on it. And promise in 5 -years time to buy back the shares at today's closing price or where the market is, whatever is the greater.
King of Wrong - BP could just cut the oil off, bringing the US to it's knees within days. The US could then retaliate by having SAC bomb BP's headquarters in St James's Square in SW1. Of course, this would convert much of Westminster to slag but what the heck? National interests are at stake. Finally, BP would use market-power to get China to retaliate, sinking the US Pacific Fleet and (at last) grabbing back Taiwan. There would also be a lot of dispossed princes and princesses in the Middle East desperate to know what to do when they have no money coming through any more. No more private torture sessions using stolen kids or 6-million-dollar shopping sprees for those poor things!
ReplyDeleteI for one sleep safer at night knowing that our future is in the hands of the oil giants.
BP has been doing nothing effective for weeks to plug this oil leak. If there were any sane regulation of the oil industry no-one would be extracting oil some three quarters of a mile under the surface of the ocean.
ReplyDeleteBP did not have the first notion as to how to stop this leak. BP clearly had made no contingency plan to deal with such a calamit. This is a BP and an oil industry failure.
Who really cares whether Obama comes across as anti-British in this context?
Remember Katrina was primarilly a natural disaster whereas the Gulf of Mexico oil spill is a man-made disaster.
Finally, what no-one dwells on in this story is that oil companies are now taking very expaensive risks by extracting oil three quarters of a mile under water.
All the cheap oil has been extracted and used up. Only expensive oil remains. Peak Oil is upon us and cheap energy will soon be a thing of the past.
Sorry Iain, I think he's bang on.
ReplyDeleteThe press over here really isn't covering the sheer outrage in the US over this spill. Maybe because people still don't realise the scale of the slick - it's now affecting an area approximately the size of Scotland in one of the US's major fisheries and it's moving towards an area heavily dependent on tourism. I can't imagine any British politician wouldn't be full of sound and fury by now if the whole of the East coast or Channel resorts were being threatened by crude.
BP is an easy target because the company has repeatedly screwed up in the US. It has a poor reputation amongst other oil companies for outsourcing activities that other companies feel must be handled internally and it has been cutting corners to increase profitability. BP was found responsible for a massive explosion in a Texas refinery not so long ago and its Alaskan operations have been accused of slapdash operations where crude was leaking from corroded pipes that should have been better maintained. And there are now serious allegations that BP ordered the rig's operators to cut corners when closing down this well.
There's another good reason Obama is angry. He recently conceded a small amount of offshore drilling in order to get his energy bill through Congress with some measure of Republican support. The BP spill has shown that the US regulatory system is a shambles and that companies can't be trusted to operate safely offshore and he had no choice but to shut down the offshore business - which has pretty much guaranteed he won't have any Republican backing for the bill.
BP itself is guilty of making the problem worse - it has tried to close down journalists asking awkward questions, attempted to block the live feed from the scene of operations, there is the head of BP's stupid 'I want my life back' quote and then they say they are still going to return money to shareholders when no one knows the state of their liabilities?
BP own the concession, they're responsible for the costs. If they want to sue TransOcean and Halliburton for their share that's an option for them. But until then they should pay every penny of the clean-up. And if that bankrupts them - oh well, that's the cost of doing business.
Now here's a question for anyone. The Conservatives are in favour of more offshore drilling around the UK - does anyone know if our regulations are as tight as those in Norway which mandates equipment that would have prevented this blowout?
"I used to think Barack Obama was a different sort of politician. I now realise I was wrong."
ReplyDeleteI agree, Iain. I am bitterly disappointed with Obama on two fronts - his lack of effective action domestically and the mess he is making of US foreign policy.
His response to the recent bout of Argentinian sabre rattling over the Falklands was outrageous, considering the extent of British support for the US in Iraq and Afghanistan.
Given the useless waste of young lives, plus the economic cost, I hope we will pull out of Afghanistan as soon as possible.
I would also like to know how much, if anything, the US are paying us for their use of Diego Garcia and their military bases in the UK. A very heavy surcharge, to compensate British pension funds for their BP losses, might be in order.
My husband works for BP and has just returned from a jolly in Vegas. He did not dare mention who he worked for the whole time he was there - such is the vitriol - encouraged by the attitue of Obama - with much being made of BP as an 'imperialist' organisation. The front man has been replaced by an american - Tony Haywood being too 'British'.
ReplyDeleteA busker who clockedmy husband's accent played a burst of our national anthem and said 'God save your Queen, sir, but not BP...' BP has no desire for this to go on a second longer than it need. If it could have been fixed sooner it would have been. If the USA is so anti 'big oil' then I suggest they switch off the power and close the gas stations for a week and see how they get on.
@The_Purpleline:
ReplyDeleteWell, the standard for emergency funding seems to have been set by Warren Buffet's bailout of Salomon Brothes in '87 (and repeated, on almost identical terms, for Goldman Sachs in 2008): Cash for convertible warrants with a 10% coupon.
I don't think there's any need for that, though. BP is cash positive, turning over about $2bn a week and keeping almost a quarter of that as profits. The cleanup so far has cost $1bn and is projected to come to $5-10bn in total, which is less than they'll earn in the time it takes to pay out.
All the talk about dividends (and, ridiculously, seizing assets) is brazen and pernicious greed on the part of US politicians. It's the sort of "money/property is leased to you by the state" socialist bullshit that really gets my goat.
@James:
Tell SAC to get right on it. Given how accurate they normally are, I look forward to seeing a smoking crater where Paris used to be...
Agreed. Policy is being dictated by what the presidents daughter says through the bathroom door.
ReplyDeleteRunning down BP affects all our pensions.
There is a basic engineering technique called failure mode and effects analysis (FMEA). It is well known but seldom used properly. It should have forced the question of what can we do if the BOP fails under 5000 feet of water? The fact that no other oil companies are suggesting that they know what to do says that they are all in the same boat. There should be no drilling at these depths until they have answered this question. They also need to be queried on their FMEA status on all their operations as a matter of urgency.
ReplyDeleteThe simple fact is that Obama doesn't know what to do. He is powerless to stop the spill.
ReplyDeleteTherefore he simply attacks BP.
Put yourself in his position.
What else can he do?
Obama is doing what he does best; he blames others.
ReplyDeleteOf course, BP is largely at fault, but there are some inconvenient truths he does not want us to know about and much of our media tends to forget.
Obama savagely criticised Bush over Katrina, even though Democrats were in charge at city and state level.
Thus, he has inflated expectations as to what a president can actually do.
http://gatewaypundit.firstthings.com/2010/06/devastating-video-obama-excoriates-government%e2%80%99s-%e2%80%98unconsionable-ineptitude%e2%80%99-during-katrina-disaster/
BP is having to drill in risky deep waters because the US government does not allow drilling in the shallower waters around much of the USA.
The Obama regime has also blundered in its response to the slick.
It did not even know what oil slick removal equipment it possessed.
http://gatewaypundit.firstthings.com/2010/05/heckuva-job-barack-homeland-security-did-not-even-know-defense-dept-had-oil-slick-equipment/
Obama sheletered BP from various requirements
http://www.globalresearch.ca/index.php?context=va&aid=19027
His government helped BP overcome environmental challenges to drilling.
http://www.wsws.org/articles/2010/may2010/obam-m11.shtml
Obama has been a major recipient of money from BP. Will he now return it?
http://www.politico.com/news/stories/0510/36783.html
And while claiming to be so interested in the spill, Obama has visted the golf course more times than he has visited the gulf, as well as taking his eye off the ball so many other times.
http://sharprightturn.wordpress.com/2010/06/04/since-oil-spill-obama-plays-golf-basketball-party-animal-with-mccartney-and-calderon-politics-fundraiser-the-blame-game-host-lunch-date-grad-speaker-presenter/
It is high time more Brits realised Obama is nothing but a blundering socialist buffoon.
Aaggghhh.
ReplyDeleteIt is NOT British Petroleum.
http://wck2.companieshouse.gov.uk/5764adbc8d16062bd03c523fae3ffa04/compdetails
Name change 31/12/98.
I have to agree with iCowboy: I think you're wrong, too, and guilty of ignoring the sheer scale of the disaster.
ReplyDeleteI understand that offshore drilling is risky, and that participating in it requires companies with cultures which accept risk, What is unacceptable though is the cutting of corners, and failure to take every (expensive) precaution when you have just discovered a valuable reserve. From everything I have read, this was most likely a preventable accident.
And it's not as though it came out of left field. It is almost a carbon copy of the Ixtoc spill a few decades back, for instance, and BP had a warning about the consequences of poor engineering last year, when it nearly lost its multi billion pound Thunderhorse platform, owing to some incorrectly installed valves.
That the blame is shared with several subcontractors is true, and will undoubtedly lead to years of litigation, but the prime responsibility rests with BP.
I don't think for a moment that it will prevent future deep ocean drilling. But it may (ought to?) mean a significant moratorium on new wells, while both government and the industry take a hard look at how they conduct operations.
What I want to know is what more the American Oil Company (Amoco, later BP Amoco; sauce for the goose, etc.) could be doing about this disaster.
ReplyDeleteA leak this deep is unprecedented and the experts in deep-water drilling and containment are already on-site and trying plan after plan after plan. As they have been since the day after the explosion. The latest plan seems - finally - to have worked.
I think they should be congratulated for a job well done and given whatever support they need in fixing the remaining problems, rather than making them the victims of political points-scoring.
I am amazed that we haven't had Nassim Nicholas Taleb pontificating.
ReplyDeleteBP had no plans for dealing with this because it was theoretically impossible - the Blow-Out-Preventer is supposed to guarantee that it won't happen. Now it appears that the design of the BOP was not as fool-proof as it was claimed.
Obama is/was a lawyer so he knows that he cannot blame Cameron or Transocean, although at least one of them is guilty (of, at least, culpable negligence), because he doesn't know which and to blame either would prejudice the lawsuits that are bound to follow and he is angry and frustrated so what can he do except blame BP?
There is also the point that BP's maximum legal liability is limited to $75m under US law and he wants BP to accept unlimited liability to get him off the hook for the poor state of the US laws when a lawyer is President. BP has already said that it will accept responsibility for its errors but if its directors pick up the tab for Transocean/Cameron they could be charged under UK law for breach of fiduciary duty. So orchestrating an anti-BP publicity campaign to make BP more scared of aggrieved US citizens than the consequences of breaking UK laws makes excellent sense (for him).
According to a note in The Times on Saturday (page 52 of the print edtion)
ReplyDeleteBP -
employs 22000 Americans against 10000 Brits
has extraction operations in Alaska, the Gulf of Mexico and on land in the US which dwarf its dwindling North Sea activities
has 9 times as many filling stations (11500)in the States as in Britain
has five refineries in the States and none in Britain
6 Brits, 6 Americans in the boardroom
39% American shareholders and 40% British
When Obama first entered the running for the presidency I described him, on numerous blogs, as "a lightweight, just a black Tony Blair".
ReplyDeleteHe's done absolutely nothing since to make me change my opinion.
Thanks Iain for a sensible view AT LAST on this disater...you must be unique. As an oil wife, I am married to one of those who are currenlty being described as the 'scum of the earth' by most people, which,frankly I find enormously dishonest. Like it or not, we STILL LIVE IN THE OIL AGE, DUH. And guess what, a great big oil spill is not only horrific, but bad business. I am reliably informed it would be easier to stop the volcano in Iceland than stop this well....the difference being, one occured naturally, while the other did not, so somebody must be blamed. Clearly something went wrong, but we don't yet know what.
ReplyDeleteIf the world wants oil, the world HAS to start understanding how it is extracted....it is simply ignorant not to be honest about it.Considering how many wells are currently drilling around the world, I am amazed this sort of thing doesn't happen more often...that is thanks to the brains and safety culture in oil that usually works, thank heavens...do people not realize how difficult extraction is??? Including Mr Obama? Or maybe we should just stop extracting oil and see how we like starving, freezing, having no clothes or houses or medicines, and not moving or even communicating.
"I am waiting for someone to compare the reaction of the US Government with that of HMG after Piper Alpha"
ReplyDeletewas just going to post the same word for word,putting aside the tragic deaths should we pop in the post a bill to Mr Obama for the rescue efforts, the inquests, the benefit payments to those they left behind, the public enquiry, the loss of earnings etc etc, he has gone down in my estimation and I am disappointed.
I have no connection with BP but have been following the story on their excellent web site, I noticed the same hysteria over the Toyota problems