BP, the news is getting bad

[hayekvindicated]

Re: BP, the news is getting bad

If things get really bad for BP (or maybe only moderately bad), I'm sure the socialist UK government would happily nationalize them, and probably void all claims for damages in the process. Failed bank, failed oil company -- what's the difference to a politician?

Well PEMEX washed their hands off all claims back in the late 1970s - they claimed sovereign immunity! I wonder how Obama would have reacted if this was PEMEX rather than BP. I have a feeling his response would have been VERY different.

Upper class white (Tory) British bosses (Hayward was educated at Eton) make for good politically correct whipping boys. Mexicans (who make up 10 percent of the voter population), not quite so easy.

[don]

Re: BP, the news is getting bad

http://www.citrusdaily.com/ap-exclus.../09/45888.html

[Slimprofits]

Re: BP, the news is getting bad

Visit msnbc.com for breaking news, world news, and news about the economy

[KGW]

Re: BP, the news is getting bad

Matt Simmons in Fortune:

http://money.cnn.com/2010/06/09/news...tune/index.htm

"We've got to stop the gusher first. Then we have to deal with the other issues. There's a lake at the bottom of the Gulf of Mexico that's over 100 miles wide and at least 400 to 500 feet deep of black oil. It's just staying there. And only the lightest of that is what we're seeing hitting the shores so far. If a hurricane comes and blows this to shore, it could paint the Gulf Coast black. We should have been pumping this oil out onto other tankers weeks ago."

[Shakespear]

Re: BP, the news is getting bad

I wonder how Obama would have reacted if this was PEMEX rather than BP. I have a feeling his response would have been VERY different.

Good observation and I think you are have hit it on the head. The "We want..." list to Mexico would have been very long.

[Mega]

Re: BP, the news is getting bad

They didn't bother with insurance!!!!!!!!!!!!!

Matt is right, this is a chapter 11 company!!!
Mike

[hayekvindicated]

Re: BP, the news is getting bad

They didn't bother with insurance!!!!!!!!!!!!!

Matt is right, this is a chapter 11 company!!!
Mike

No insurance company would have been able to survive a claim of this size.

If they don't plug the gusher soon, it could go to chapter 11. If they plug it soon, the company would be able to pay for the spill. The current estimates of losses and claims max out at $25 Billion. While that would set the company back, it could meet those claims without going under.

[GRG55]

Re: BP, the news is getting bad

The hypocrisy of the public never ceases to amaze me. Right now everyone is screaming bloody murder at BP. But when the price of oil hits $200 which it could easily do if there was a total ban on offshore drilling in the US, no one will talk about Deepwater Horizon. Obama will be on TV demanding that "Big Oil" reduce the price to $60 a barrel.

The public wants $1 gas and no oil spills. That's what I call la-la land.



I would like to know what kind of insurance cover BP has. I will be amazed if BP ends up footing the entire bill for this. Third Party insurance cover well in excess of $1 billion is common even amongst medium sized commodity traders. No sensible commodity trader/producer would operate on any scale in the market without adequate insurance cover.

I would guess (I have no information on this but Im guessing) that a massive oil company like BP probably has insurance cover up to $20 Billion per "incident" in the aggregate (I will be amazed if it was any less than that). If this is so (and there are good reasons to believe that it is), then it is not the stock of BP which should be getting hammered but those of its insurers. Interestingly enough, no one in the market has talked about insurance liability so far.

It will be a ridiculous irony if the primary insurer turns out to be AIG.

Most large oil companies are self insured. The insurance companies do not have the balance sheets to take on the sort of risks that oil explorers, producers, gas processors, refiners and chemical manufacturers [the major oil companies all have petrochemical operations] are exposed to. The risk weighted cost of self insuring is usually cheaper than what the insurance company premiums would be...if they could get the coverage at all.

[touchring]

Re: BP, the news is getting bad

The hypocrisy of the public never ceases to amaze me. Right now everyone is screaming bloody murder at BP. But when the price of oil hits $200 which it could easily do if there was a total ban on offshore drilling in the US, no one will talk about Deepwater Horizon. Obama will be on TV demanding that "Big Oil" reduce the price to $60 a barrel.

The public wants $1 gas and no oil spills. That's what I call la-la land.

There's always coal which doesn't leak ;) - http://www.vbs.tv/watch/toxic/toxic-linfen-china

[thriftyandboringinohio]

Re: BP, the news is getting bad

RIG chart looks to me like it's put in a bottom around $42 and is now up around $53. The 2-year chart is here. FULL DISCLOSURE: I am the world's worst trader and analyst.



http://finance.yahoo.com/echarts?s=R...urce=undefined

[touchring]

Re: BP, the news is getting bad

RIG chart looks to me like it's put in a bottom around $42 and is now up around $53. The 2-year chart is here. FULL DISCLOSURE: I am the world's worst trader and analyst.



http://finance.yahoo.com/echarts?s=RIG+Interactive#chart2:symbol=rig;range= 2y;indicator=bollinger(20,1.5)+volume;charttype=li ne;crosshair=on;ohlcvalues=0;logscale=on;source=un defined

I would rather stay away from the people that actually caused the leak as unlike Obama who will shake up whoever he wants to shake, the courts would still have to go by the law when it comes to liability and responsibility. If the courts were to assign a mere 10% responsibility for the leak to RIG, RIG is almost a bankrupt company.

[Slimprofits]

Re: BP, the news is getting bad

BP oil spill: leak found in rig weeks before blast

The Deepwater Horizon rig, which exploded causing the Gulf of Mexico oil spill, had suffered a leak in the weeks leading up to the blast, an employee has claimed.

"We saw a leak on the pod, so by seeing the leak we informed the company men," Mr Benton said. "They have a control room where they could turn off that pod and turn on the other one, so that they don't have to stop production."