No announcement yet.

BP faces 'billion pound bill' as clean-up costs escalate

  • Filter
  • Time
  • Show
Clear All
new posts

  • BP faces 'billion pound bill' as clean-up costs escalate

    New nicknames for BP?

    "Barge Pole"

    By Emma Rowley
    Published: 6:12PM BST 30 Apr 2010

    Sources close to the situation initially said paying for the clean-up, for which President Barack Obama holds the British oil giant "ultimately responsible", could reach $200m (?130m).
    Analysts are now putting a much higher figure on the total cost, with estimates passing $3bn. The oil slick was triggered when Deepwater Horizon, a rig leased by BP, exploded and sank last week, causing 11 deaths. BP has confirmed it is self-insured for any costs related to the spill.

    [...blah blah...]

    Many have compared the situation to the 1989 Exxon Valdez spill in Alaska, the worst on record in the US. Exxon spent $2bn on the clean-up and was eventually found liable for $800m in compensation.
    By the time the Gulf slick reached Louisiana yesterday, shrimpers in the state and nearby Alabama had already filed class-action lawsuits against BP and the platform's owners. In addition, Florida declared a state of emergency in its coastal counties.
    With $20bn wiped off BP's market capitalisation following the crisis, analysts said now was the time to snap up shares. "A couple of US investment banks have rushed out buy notes," said Tony Shephard at Charles Stanley & Co.
    It has emerged that the leaking oil well did not have a remote-control shut-off device, called an acoustic switch, used elsewhere as last-resort protection against spills.
    US regulators do not demand its use on offshore rigs and BP said safety devices were the responsibility of the rig's owner. However, the news was seized upon by critics of US drilling policy as a sign it had been lax.
    Environmentalists were already unhappy about plans to expand oil drilling, coming after decades during which it was banned in most US offshore areas outside the Gulf of Mexico. The White House said yesterday no drilling would be authorised in any new areas until a review of the spill took place.
    The disaster could also lead to changes in the rules on who is allowed to operate in the deeper waters of the Gulf, analysts said. The government could limit licences to larger companies, like BP, which have the resources to mount large clean-up operations.

    BP and the Coast Guard have mounted what the company called the largest oil spill containment operation in history, involving dozens of ships and aircraft.

    BP admitted struggling to control the spill, which is 5,000 feet under the sea off Louisiana's coast, and appealed for help. It has asked the Pentagon for access to military imaging technology and remotely operated vehicles to try to help it plug the ruptured well.

    Eleven workers are missing and presumed dead after the rig exploded 11 days ago.


    There are signs the spill may be worse than one in 1969 off Santa Barbara, California, which prompted a moratorium on oil and gas drilling off the Pacific and Atlantic coasts -- a ban Obama has said he wants to modify.

    Bill Nelson, a Democratic senator from Florida, said he was introducing a bill to temporarily prohibit the administration from expanding offshore drilling, citing the risk of a potential "environmental and economic disaster."

    Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak. BP is hoping to cover the well with a giant inverted funnel that would capture the oil at the sea floor and channel it directly to a tanker ship.

    But that will take four weeks to put in place, by which stage over 150,000 barrels could have been spilled. If the funnel does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take 2-3 months.

    You know what that means, don't yer..

    The Louisiana Offshore Oil Port, which handles more than 1 million barrels a day of crude oil imports, is operating normally and doesn't expect any impact on operations, LOOP spokeswoman Barb Hestermann said.

    Fears of disruption to crude oil imports or soybean exports escalated on Thursday as an offshore oil well continued to gush crude, and after White House spokesman Robert Gibbs told reporters that President Barack Obama had been briefed on how the spill could interfere with shipping channels.

    "A big threat is to tanker traffic both inbound and outbound," said a crude oil trader who declined to be named. "The closer it comes to shore the bigger the problem, since the Coast Guard will not want any vessel to be fouled by oil."

    But for the moment, traders and port officials said they didn't anticipate a major impact, even after the U.S. Coast Guard ordered commercial seagoing vessels to avoid the slick, caused by the collapse of a deepwater drilling rig.

    The giant LOOP terminal typically handles up to 15 percent of U.S. crude imports and supplies refiners in the key Gulf Coast region. It is located some 50 to 60 miles west of the oil slick, which has been moving eastward, potentially placing shipping traffic at risk.

    This seems to not bode well for current, recent, or imminent BP cadets... ... _oil_spill
    Emeritus Admin & Founding Member