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US embassy cables: BP in Russia for long haul, US told
This is a WikiLeaks embassy cable covering some of BP's Russian business strategies and machininations. It's hard to think of two entities more deserving of having to put up with each other than BP and the criminal oligarchs who run the Russian oil business. One hopes they keep so fully occupied with trying to screw one another that they don't have time screw the rest of the world.
Cable dated:2008-11-24T14:44:00
C O N F I D E N T I A L SECTION 01 OF 02 MOSCOW 003394
SIPDIS
DEPT FOR EUR/RUS, FOR EEB/ESC/IEC GALLOGLY AND WRIGHT EUR/CARC, SCA (GALLAGHER, SUMAR) DOE FOR HEGBURG, EKIMOFF
E.O. 12958: DECL: 11/18/2018
TAGS: EPET, ENRG, ECON, PREL, RS">RS
SUBJECT: BP VP TELLS AMBASSADOR COMPANY IS IN RUSSIA FOR LONG-TERM, GETTING OUT OF CPC
REF: A. MOSCOW 3297 B. MOSCOW 2855 C. ASTANA 2144
Classified By: Ambassador John R. Beyrle for Reasons 1.4 (b/d)
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SUMMARY
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- (C) At a November 20 meeting, BP's new Group VP for Russia and Kazakhstan, David Peattie, told the Ambassador that BP is in Russia for the long-term. The troubled partnership in TNK-BP (ref A) is only a part of their involvement and he said BP would not be surprised to see the company split up and taken over by Gazprom and Rosneft within 2 years. BP is actively pursuing options with both companies for the future. In the interval, Peattie confirmed that BP has agreed to Denis Morozov, formerly with Norilsk Nickel, as the new CEO and said he expects Morozov may prove more independent than the AAR partners will like. He predicted Russian oil production will drop by between three and five percent as companies contract capital spending in light of oil prices and credit constraints. With regard to CPC (refs B and C), Peattie said BP is holding up the expansion as a negotiating tactic but plans to exit CPC (and Kazakhstan) by selling its stake in two parts to KazMunaiGaz (KMG) and Lukoil. End summary.
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TNK-BP AND BP'S FUTURE IN RUSSIA
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- (C) Peattie told the Ambassador that BP plans to be in Russia "for the next 50 years" and is thinking of the long-run in terms of its investments. He said TNK-BP is a large and important part of BP's presence but might not be the main vehicle for BP going forward. In that regard, he noted that BP had invested $8 billion in TNK-BP but had already realized $9 billion in profits. Instead, he cited BP's growing ties with Rosneft, in which it has a one percent stake, as the potential long-term foundation of BP's involvement in Russia. Peattie said to that end, BP was increasing its direct presence in Russia.
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- (C) On pending expansion of the Caspian Pipeline Consortium (CPC) pipeline, in which BP is a partner, Peattie said BP is withholding its approval of the most recent expansion agreement (refs B and C) as a "negotiating tactic" in its talks to sell out its share to KMG and Lukoil. He explained that BP plans to be out of CPC and the sale to KMG of the share BP inherited from Amoco is almost complete. BP is trying to sell the share it inherited from Arco to Lukoil. Once complete, according to Peattie, BP will be out of Kazakhstan altogether, and will focus on its investments in Russia and the BTC oil pipeline (from Azerbaijan to Turkey). BP is also interested in Turkmen gas, but that is a longer term prospect.
BP's Russian Stake May Avoid U.S. Review Demanded by Lawmakers, Group Says
It will be interesting to see if Republican natural antipathy towards Russia or their greed for oil money in their campaign coffers will win the day in hearings on Russia's and BP's unholy alliance.
BP Plc, which gave Russia’s state- controlled OAO Rosneft a 5 percent stake, may not have to face a U.S. review that lawmakers are demanding, according to the head of a group representing U.S. subsidiaries of overseas companies.
“I do not expect the deal will trigger” a foreign- investment review, Nancy McLernon, president of the Organization for International Investment, a trade association in Washington, said yesterday in a phone interview. “BP either has or will speak to all those in the government, either on the Hill or otherwise, that have questions about the deal to ensure a smooth transaction.”
On Capitol Hill, lawmakers including Representative Michael Burgess, a Texas Republican, are urging that the stock swap, announced on Jan. 14, be reviewed by the Committee on Foreign Investment in the U.S. to determine possible effects on BP America Inc., the London-based oil company’s U.S. subsidiary. It was the Pentagon’s biggest fuel supplier in fiscal 2009.
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Representative Edward Markey of Massachusetts, the top Democrat on the House Natural Resources Committee, said in a statement on Jan. 14 that a review is needed and that the deal may “complicate the politics” of BP’s liability for its Gulf of Mexico oil spill last year.
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Markey, who said BP now stands for “Bolshoi Petroleum,” called for an immediate review by the Committee on Foreign Investment “if this agreement affects the national and economic security of the United States.” He said the State Department should also “closely monitor” the transaction.
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McLernon’s group represents U.S. subsidiaries of companies based outside the U.S., including BP, drugmaker Bayer AG and mobile-phone manufacturer Nokia Oyj. She said she hasn’t discussed the deal with BP executives.
Timeline: BP's energy projects in Russia
BP has had some rocky patches while doing business in Russia. Wishing them much worse to come.
2006 - Prosecutors in the Siberian town of Irkutsk demanded a local natural resources agency suspend TNK-BP's license for the Kovykta gas field on environmental grounds.
2007 - TNK-BP agreed in 2007 to sell Kovykta to Gazprom for about $1 billion but the deal collapsed due to disagreements over the price.
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2008
March - Russian police raided the offices of BP and TNK-BP in Moscow and questioned managers. There was speculation that the Kremlin wanted one of its own companies, such as state gas monopoly Gazprom (GAZP.MM), to buy out the Russian billionaire shareholders in the venture and become a partner of BP.
The Interior Ministry said it was investigating tax evasion worth over $40 million involving SIDANKO.
May - Court action by a local brokerage stopped TNK-BP using key foreign specialist staff.
June - TNK-BP's Russian shareholders threatened BP with legal action to strip BP-nominated directors of their powers in TNK-BP as the corporate conflict flared up.
July - Russia's migration service said TNK-BP Chief Executive Robert Dudley was not allowed to work in Russia under his temporary visa.
August - Dudley left Russia blaming a campaign of harassment in a fight for control between BP and its partners.
BP cleanup extends beyond area waters
I covered this local story about the cleanup of the vessels that were oiled during the response to BP's black monster. The cleanup crews were all inexperienced and newly trained which made me wonder who was checking their work. The Tri-Parish Times posted a comment from someone whose vessel was supposedly "cleaned." There is no indication in the story about who, if anyone, is certifying vessels as being truly cleaned.
Preston Dore Jr wrote on Jan 18, 2011 11:55 AM:
"My vessel was in the VoO program and was severely damaged and contaminated. My vessel was put through a one hour decontamination process that was a joke. I could not possibly put food on my vessel now and feel that the public would not get contaminated. My vessel still sits at the dock severely damaged and contaminated. I feel like I was used by BP and then thrown to the dogs to defend for myself. It would probably take everything I made in the VoO program to put my vessel back the way it was before they hired me."
BP spill boosts charitable giving
It was nice to read a silver lining in the BP catastrophe cloud, however small.
The oil spill in the Gulf of Mexico was bad for the environment, but good for environmental nonprofits’ coffers.
A new survey finds that environmental and animal welfare organizations saw overall giving increase 3.2 percent, year-over-year, for the three months ended Nov. 30.
The trend, based on $259 million in 12-month online charitable revenue from 93 organizations, indicates an increase after three negative months, according to data released Tuesday by Blackbaud.
The Charleston, S.C.-based company, which provides software and services to nonprofits, also found that online giving for those two groups rose 15.8 percent in the same three-month period.
Tuna Fight Muddies Waters Over Damage From BP Spill As much as it pains me to link to the Wall Street Journal they have an excellent piece on the controversy surrounding the decision to put the Atlantic bluefin tuna on the endangered species list. There are disagreements over where they spawn and how much damage BP‘s black monster might have done to the population.
Unsurprisingly, No Oil At All (NOAA) comes down on the side of bluefin tuna not being harmed by the magically disappearing oil that every other scientist in the universe could find.
The graphic of the European Space Agency's model of where the bluefin tuna were during the spill is on the WSJ site. The Center for Biological Diversity also has a map of the bluefin habitat overlaid on the oil. h/t DawnN
The bluefin tuna is one of the most majestic and prized creatures in the sea. Last week, one caught off Japan sold in Tokyo for $396,000, to be used as sushi.
Now the fish is the subject of a scientific fight that shows how hard it will be to gauge the environmental fallout of the biggest offshore oil spill in U.S. history.
The U.S. government will wrap up public meetings next week on whether to recommend declaring the Atlantic bluefin an endangered species. If the government declared the fish endangered, it would bar fishermen from targeting the fish in U.S. waters. An environmental group filed the request last year, claiming in part that the western-Atlantic stock of the fish, long believed to spawn only in the Gulf of Mexico, would "be devastated" by last year's spill from a blown-out BP PLC well.
But scientists disagree about what portion of last spring's crop of young tuna, or larvae, were hit by oil. They disagree about whether the Gulf is the only place where the western-Atlantic bluefin spawns. In short, they disagree about virtually every aspect of the spill's effect on the fish.
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The question is whether the spill hurt or killed enough young bluefin that it will reduce the population in future years.
Bluefin hatch in the northern Gulf from roughly May through June—in the general area, and at the general time, of the BP spill. Eggs and larvae in the oil almost certainly died, scientists say.
That doesn't address the bigger issue: how the spill affected the bluefin population as a whole. Answering that would require knowing all the places bluefin spawn—in the Gulf, and beyond.
Accepted wisdom has held that there are different stocks of Atlantic bluefin. One, which regulators call the western variety, spawns only in the Gulf. Another, the eastern variety, spawns only in the Mediterranean Sea.
As adults, both stocks forage for food in the Atlantic, where most bluefin are caught. But, the thinking goes, the two stocks are genetically distinct.
That's the basis for the concern that the BP spill could decimate the western-Atlantic bluefin.
Some scientists, though, increasingly question that view. Citing recent modeling, NOAA now concludes most of last spring's Gulf spawn was far from where the oil hit. "Some of the bluefin probably got hit a little bit, but [the oil spill] probably was not a significant impact on the population," said John Lamkin, a NOAA scientist.
Other tuna experts cite evidence that large numbers of western-Atlantic bluefin may spawn beyond the Gulf—in the Caribbean, for instance, and as far away as the Azores.
Still, for whatever bluefin did run into BP oil, the spill could prove enormously damaging, scientists say.
Research by NOAA scientists since the Valdez spill has found that even small concentrations of oil can be deadly for fish. It can cause heart problems that can kill fish years after a spill. And it can kill or taint organisms fish eat.
Humans have caught bluefin for millennia. Archaeologists in southern Europe have found cave paintings of the fish they say date back several thousand years.
By the 1960s, commercial-fishing techniques, including modern versions of massive nets known as "purse seines," vastly improved efficiency of the bluefin catch. By 1966, concerns about overfishing led to the creation of the International Commission for the Conservation of Atlantic Tunas, which works with governments to regulate the fishery.
Despite these efforts, the western-Atlantic bluefin population plummeted more than 70% between 1970 and 2009, the commission [International Commission for the Conservation of Atlantic Tunas] estimates. Gauging fish populations is an inexact and controversial science, relying in large part on reports of the number of fish caught. Last year, when the commission published its latest Atlantic-bluefin populations estimate, it noted "uncertainty" in the calculations.
Many environmentalists and regulators blame overfishing for the bulk of the fish's decline. Many in the fishing industry blame a range of factors including climate change, which they say is pushing the bluefin to waters the industry hasn't found.
Each side has sponsored scientists whose work bolsters its view. A major point of contention is whether western-Atlantic bluefin spawn beyond the Gulf. If they do, then under U.S. and international fishing rules, there might be less justification for declaring the fish endangered.
Stanford University tuna expert Barbara Block's work has helped underpin the just-in-the-Gulf view.
In the ocean, she and her research team catch bluefin, and ease the live fish into a boat. They insert tracking devices, either by incision into the fish's belly, or with a dart at the base of one of the fish's fins. Within minutes, they release the tagged bluefin. Since the 1990s, Ms. Block has plotted the tracks of hundreds of tuna.
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"The Gulf of Mexico has a unique stock of bluefin," which raises concerns about the spill's effects on the fish, even if bluefin traditionally described as part of a western-Atlantic stock are spawning beyond the Gulf, she said. "There's absolutely a question of what the impact" of the spill on Gulf-spawning bluefin will be, she said.
In early May, two weeks into the spill, in a blog post titled "Hot Tuna and Oil" on the website of a tagging program she helps run, she featured a map of the Gulf with a black blob showing the area hit by BP oil. Through the blob ran a yellow line: the path that data showed one of Ms. Block's tagged tuna had traveled in 2009.
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Two days later, another scientist fired off a contrasting view.
On May 26, Molly Lutcavage, a longtime tuna tagger now at the University of Massachusetts, Amherst, published with several colleagues a peer-reviewed paper reporting that some bluefin they had tagged were swimming beyond the Azores during the spring, when the fish are known to spawn.
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Ms. Lutcavage got her start in bluefin research in the 1990s with money from the New England fishing industry, which was fighting environmentalists' calls for tougher bluefin limits.
She said her scientific conclusions aren't influenced by that industry backing. Since that initial project, she said, she has gotten all her research money from the government.
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Even if scientists can determine conclusively that spawning takes place outside of the Gulf, that won't resolve how damaging the spill was to the tuna in the Gulf.
Last October, the European Space Agency published a study estimating the spill killed more than 20% of last spring's Gulf bluefin spawn. The agency did the study to tout its technology, Olivier Arino, an agency official, said.
The study set off alarms within the Obama administration. Mr. Lamkin said a high-ranking NOAA official emailed him saying Jane Lubchenco, the agency's administrator, wanted a report within days on whether it was right.
Mr. Lamkin's conclusion: It was wrong.
BP drilling permit sparks outrage - ABC News (Australian Broadcasting Corporation)
Australian Resources Minister Martin Ferguson seems to be striving to take Reagan's Secretary of the Department of the Interior, James Watt's, top spot as the public official most remembered for being hostile to the environment. Not content with presiding over one massive Australian oil spill, Ferguson seems hell-bent on setting Australia up for even worse.
There has been a furious reaction to the Australian Government's decision to grant deep sea drilling permits to BP.
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A White House investigation led by William Reilly uncovered a culture of complacency, cost-cutting and systemic failures, and companies unprepared to deal with accidents and consequences.
"BP was irresponsible and I think to a significant degree incompetent with respect to several major decisions that were made in the rigs - some of which we don't understand," Mr Reilly said.
But the Australian Government is undeterred and it has given BP permission to explore for oil and gas in 24,000 square kilometres of the Great Australian Bight.
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"It is a tough decision. BP will be held to account by the Australian Government," he said.
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However, environment groups are incredulous.
Steve Campbell from Greenpeace Australia Pacific says Australians should be asking themselves whether Mr Ferguson, who presided over Montara which is Australia's worst oil spill, is playing some kind of sick joke on the public.
“It's a fact that BP will be allowed to prospect for oil at depths over three-times greater than the Deepwater Horizon was operating and we know that at the end of the day, oil rigs drilling at these kinds of depths can have major impacts on coastal environments,” he said.
But the Minister says strict new rules will apply.
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But Greenpeace's Steve Campbell says BP cannot be trusted.
“BP tried to change their spots in the 90's by changing their name from British Petroleum to Beyond Petroleum but you know we've seen scant evidence of them becoming a more responsible company or indeed investing more heavily in renewable energy - they simply haven't done that,” he said.
Could BP’s Offshore Permits Signal a Major Oil Spill for Australia?
This alarming headline from an Australian business journal seems to indicate that the business community in Australia may be less than thrilled with their government's decision to allow BP to proceed with deepwater drilling. Mentioning conservation groups‘ opposition without including a vigorous rebuttal also seems more than passing strange for a business journal.
Although BP has been granted four offshore oil exploration permits from the Australian Federal Government, many fear the petroleum giant hasn’t learned from mistakes made from the 2010 Gulf Oil Spill.
The Deepwater Horizon Oil Spill, which occurred from an April explosion that killed 11 workers and dumped 5 million gallons of oil into the Gulf of Mexico, has been a PR nightmare for BP. The company has been accused and sued for a plethora of reasons, including slow response time, covering up details and possessing faulty equipment at the site of the oil rig.
Despite this, BP will begin its offshore exploration in the Ceduna Sub-basin within the Bight Basin off South Australia. The exploration work programs proposed by BP Exploration include over 11,400 square kilometers of 3D seismic surveying within the first two operational years along. Drilling could begin as soon as 2013, but further environmental approvals would be required to begin this.
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Part of the push to get BP into Australia is that it will bring millions of dollars of investment to the Australia, which could tackle the nation’s $16 billion trade deficit in petroleum products.
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Conservation groups, such as the Conservation Council of Western Australia, have already begun protesting the decision made by the Government.
Marshes remain blackened by oil from BP blowout
Louisiana's precious wetlands remain fouled by oil while the long term impact remains highly uncertain. I'm not holding my breath waiting for the government to make deepwater drilling permits contingent on developing an effective, environmentally sensitive method of removing all spilled oil from critically important wetlands. BP should have to pay yearly fines for impacted wetlands until not a single drop of oil can be found in them and all flora and fauna are fully recovered.
It smells like oil.
Swaths of marsh grass in Bay Jimmy are flattened, glued together with a brown sludge.
Step into mud, and the hole fills up with a dark, oily substance.
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In many other areas, the oil is out of sight but still there, sometimes nearly two feet underground.
Two major questions dog scientists and state officials: How much more oil is lingering offshore, and how will the spill affect wildlife and the eroding coastal wetlands in the long term?
Garret Graves, director of the Governor’s Office of Coastal Activities, said the most heavily oiled areas are mostly west of the Mississippi River in the Barataria Basin, including Bay Jimmy.
“Right now, we still have more than a hundred miles that is still active with oil on it,” Graves said.
Small patches of oil dot the coast in other spots, including Biloxi Marsh and the Rigolets, he said.
Elsewhere, the oil has been buried in the sand by wind and waves. On East Grand Terre Island, a layer of oil lies about nine inches below the surface, Graves said. At Grand Isle, oil has been found as deep as 22 inches, he said.
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“The thing that just scares the heck out of us is the unknowns,” Graves said. The extent of the damage done to marsh grasses — which hold together much of the state’s coastal wetlands — is not yet apparent.
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The effects of the spill on wildlife is likely to take years to determine, scientists say.
This spring or summer, researchers will be able to see how nesting is going for native species — but that will be only one year of data.
Populations of birds and fish can vary widely from year to year based on many environmental factors, said Clinton Jeske, wildlife biologist with the National Wetlands Research Center in Lafayette.
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One unknown is the impact the oil may have had on breeding stocks of fish in the open water.
“We’re going to be looking in the long-term at the stuff that is offshore, like shrimp,” said Kerry St. Pé, executive director of the Barataria-Terrebonne National Estuary Program.
However, simply measuring the number of shrimp over the next year won’t answer the question, St. Pé said.
Populations vary so much from year to year that it becomes tough to say whether a sharp decrease is a crash caused by oil or simply a normal variability, he said.
“It’s the same with red drum population,” he said. “Populations fluctuate wildly. You can’t just look at next year’s redfish and say, ‘Oh we got impact from oil.’ It’s going to be several years before we can tease out any impact.
In the meantime, frustration remains high in Plaquemines Parish and other areas where marshes remain blackened by oil, and tar balls continue to wash ashore.”
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Darren Angelo, owner of Delta Marina in Empire, served as a parish liaison during emergency response to the oil leak. He agrees that the process has been frustrating. “BP says it’s cleaned up. BP says there’s no oil here,” Angelo said.
“BP is in the business of producing oil, not cleaning up oil spills.”
BP Gulf of Mexico spill: The American dream, tarred by oil
Louisiana residents continue to struggle with the consequences of BP's deepwater gusher and the cognitive disconnect of deepwater drilling and fishing being compatible.
“It‘s called the American dream because you have to be asleep to believe it,” said Kindra Arnesen, as she listed the medical ailments she says she and her husband, a fisherman in Venice, Louisiana, have suffered from in the past eight months.
She was one of about 200 people who turned up at a hotel in the centre of New Orleans almost six months to the day since BP stopped the oil flowing in the worst spill in US history.
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“It‘s the unknown in all this that has got everyone nervous,” explained George Barisich, head of the United Commercial Fisherman”s Association.
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The commission”s report was published on Tuesday. It recommended a series of changes to oil exploration and production in the Gulf of Mexico, as it pinned the blame for the spill on systemic failures of the industry and regulators.
That message won some applause from an audience that voiced anger at BP, the government”s response to the spill and Ken Feinberg, the man in charge of handing out the $20bn the UK oil company has sunk into the fund.
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“I”ve sent emails to Feinberg and the president,” said Theresa Braggs, a New Orleans taxi driver who says her earnings have been cut in half by the spill but hasn‘t had any compensation. “I live and breathe the GCCF.”
Unlike most tourists, it wasn‘t the music that persuaded the commission to choose New Orleans to explain their findings.
Though oil tarballs reached as far as Florida, and New York restaurants have sought compensation because they”re not selling as many oysters, Louisiana was at the heart of the spill. Many businesses say by the start of 2010, their recovery from Hurricane Katrina, which swept through five years earlier, had found a firmer footing.
The rapid expansion of exploration in the Gulf of Mexico had helped keep unemployment in the state below 7pc in the first four months of the year as America struggled with recession. “I was beginning to see a turnaround [after Katrina],” says Douglas Dawson, who runs an antique shop in the French Quarter, a magnet for tourists in New Orleans. “Since the spill has happened, I”m right back where I was.”
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Almost nine months on from the fatal explosion on the Deepwater Horizon rig, the troublesome question for Louisiana seems to be whether Sunseri [vice president at P&J Oyster] and Giberga [an executive at Hornbeck Offshore Services] can both get what they want. If the new regulations proposed by the commission do become law, will they prompt the oil industry to scale back its drilling in the Gulf? If not, will the rest of the state”s economy be prepared to live with the threat of another spill?
Feinberg, BP Discussing Compensation for Running Claims Facility
The monthly fee arrangement Feinberg had with BP expires this month.
Kenneth Feinberg, the administrator of the $20 billion claims fund for victims of the BP Plc oil spill, is negotiating with the company on his compensation, his spokeswoman said today.
Feinberg Rozen LLP, a Washington-based law firm, has been paid $850,000 a month since mid-June, when Feinberg agreed to run the claims facility that is paying victims of the largest U.S. oil spill.
Feinberg, BP claims agents will be in Fort Walton Beach, Florida on Wednesday
At the suggestion of Destin, Florida mayor Feinberg will have up to a dozen claims examiners in tow with him when he meets with Fort Walton Beach area claimants. I hope there is followup reporting as to whether or not the claimants have found the claims examiners’ presence helpful.
The federal government’s $20 billion man will be in Fort Walton Beach on Wednesday.
And word has it that Ken Feinberg, the administrator of the Gulf Coast Claims Facility, will bring claims agents to the Emerald Coast Conference Center with him.
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Feinberg, who has been charged with dispersing BP money to those who suffered losses due to last year’s Deepwater Horizon oil spill, will hold his town hall meeting at 8:30 a.m.
Feinberg “will be there to meet with citizens to explain the Gulf Coast Claims Facility (GCCF) guidelines and process for interim and final payments and “quick pay” claims, a news release announcing the event states.
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The Destin and Fort Walton Beach chambers are sponsoring the event.
For more information, call the Fort Walton Beach chamber at 244-8191 or the Destin chamber at 837-6241.
Plaintiffs' Lawyers in BP Litigation Fighting Over Claims Fund
The battle seems to be between lawyers who would prefer to take their chances that going to court in the future will garner them larger fees versus those lawyers who prefer to take their cut sooner from clients who have applied to Feinberg's BP fund. The dispute does leave one wondering if the lawyers are acting in their clients’ best interests or their own.
Plaintiffs” lawyers battling BP Plc in the oil-spill litigation may be united in the desire to make the company pay, but they”ve started fighting over whether to try to rein in Kenneth Feinberg, who runs BP‘s $20 billion oil-spill victims‘ compensation fund.
One group of lawyers, comprised of the 17-member plaintiffs‘ steering committee, appears to be concerned that Feinberg will draw many more claimants into his fund — thereby reducing the number of potential plaintiffs these lawyers can represent in their multi-district litigation. Anyone who accepts a final settlement with Feinberg gives up the right to sue in court.
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In a motion filed last month, the committee asked U.S. District Court Judge Carl Barbier of the Eastern District of Louisiana to order Feinberg to modify the release form — which claimants must sign before accepting a final payment from the fund — so that it notifies victims they have the option to sue and recommends they talk to a lawyer before giving up the right to do so.
These lawyers also want Feinberg to stop calling the fund ”independent,” since he is paid by BP.
The other group of lawyers, comprised of six plaintiffs” firms, essentially wants to leave things as they are.
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If the judge begins monitoring Feinberg, these lawyers argue in court filings, it could interfere with settlement negotiations and slow claims payments.
Fewer than 3 percent of the 470,000 businesses and individuals who have filed claims with Feinberg”s fund have lawyers helping them negotiate, according to fund statistics.
(Reporting by Moira Herbst of Reuters Legal; Edited by Eric Effron and Amy Stevens; Contact: moira.herbst@thomsonreuters.com)
Judge divides BP shareholder plaintiffs into two groups
It seems that the plaintiffs had divergent views on the theories of the case. I don't pretend to understand the arcane minutiae of securities law but there is plenty to ponder in this story if you click through.- h/t Yasuragi
U.S. District Judge Keith Ellison cured conflict among BP shareholders in national securities fraud litigation by splitting them into two groups.
On Dec. 28, the judge for the Southern District of Texas in Houston picked public pension trustees of New York and Ohio as lead plaintiffs alleging five years of fraud, and he picked a separate group alleging barely one year
"Absent class members could be prejudiced by New York and Ohio's manner of drafting a consolidated complaint, defending motions to dismiss, and conducting discovery," Ellison wrote.
He found it particularly important at the early stage of the case to avoid appointing a lead plaintiff who could not fully and fairly represent absent members.
"The court expects the lead plaintiffs to work together as needed to prevent inefficiencies in discovery and other stages of the litigation," he wrote.
"For example, the court expects that no witness should need to be deposed more than once simply because of the presence of multiple lead plaintiffs," he wrote.
He gave each group 45 days to file a complaint.
Ellison presides over seven securities fraud complaints that BP shareholders filed after the April 20 explosion of Deepwater Horizon offshore oil rig in the Gulf of Mexico.
He presides over eight other shareholder actions under federal retirement law.
He operates separately from U.S. District Judge Carl Barbier of New Orleans, who handles almost all other Deepwater Horizon damage claims from federal courts.
BP Reassessing Transocean, Contractors it Blames for Oil Spill
Ignoring the fact that its own safety record is by orders of magnitude far worse than Transocean‘s, BP is reviewing its business relationship with the Deepwater Horizon's rig owner on the basis of their finger pointing internal “investigation.” BP seems utterly oblivious to its own responsibility in overseeing Transocean‘s decisions. It will be interesting to see if current and potential BP subcontractors will factor in BP's willful ignorance of safety and charge BP more money for their services than they would a more reliable partner.
A scary bit of information in the story is that BP will have a huge increase in their drilling this year despite the Macondo blowout demonstrating BP's egregious incompetence and shoddy safety record.
BP Plc, facing billions of dollars in damages and penalties for causing the worst U.S. offshore oil spill, is reviewing its relationships with Transocean Ltd. and other contractors involved in the catastrophe.
BP has five Transocean rigs under contract at a total cost of almost $2 million a day, a Jan. 13 filing by the rig owner with the U.S. Securities and Exchange Commission showed.
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BP’s internal investigation concluded in September that Transocean, which owned the rig, and other contractors held most of the blame for the Macondo blowout.
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BP probably will spend $9.5 billion this year on drilling wells and constructing production facilities, a 36 percent increase from 2010, James D. Crandell, an analyst at Barclays Plc, wrote in a Dec. 15 report. That would be the biggest increase among a group of the largest international oil companies that includes Exxon Mobil Corp. and Royal Dutch Shell Plc, according to Crandell’s estimates.
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Lawyers representing BP have castigated Transocean’s safety record in the Gulf and other deep-water oil provinces during several months of hearings before a U.S. Coast Guard-Interior Department investigative panel.
BP said in the internal investigation that its probe found seven of the eight judgment errors and equipment failures that led to the tragedy were the fault of Transocean, Halliburton Co. or Weatherford International Ltd. Halliburton, based in Houston, poured the cement used to bind the steel pipe in the well to the surrounding rock formation. Weatherford, based in Geneva, provided valves for the $154.6 million project.
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William Reilly , co-chairman of the panel appointed by President Barack Obama to look into the disaster, said on Jan. 6 that BP was “centrally responsible.”
The Will to Drill
This lengthy New York Times Magazine article is about the risks of oil exploration but it also has some snippets about world oil supplies and deepwater drilling risks. One definitely gets the impression from the article that the overriding concern about exploration drilling is financial rather than safety.
Oil reserves have been declining for a decade, and it is an article of faith among petroleum geologists that the easy oil — easier to find, less complicated to drill — has all been extracted and that the explorers are now into the hard oil. When the Deepwater Horizon rig, drilling an exploratory well deep into rock through a mile of water and three miles into the ocean floor off the Louisiana coast, struck a highly pressurized pocket of oil and gas, causing an explosion, it was in some ways a consequence of this iterative, competitive game, each generation of discoveries pushing further into the unknown.
A few years ago, the industry norm was to drill at depths of 15,000 or 20,000 feet. Now the frontier is 35,000 feet, where engineers find higher temperatures and pressures. “The scarcity of new reserves has been driving companies into plays that have previously been seen as extremely high risk and high cost,” said Brian Maxted, the chief executive officer of Kosmos Energy, a deepwater-exploration company in Dallas. “The trend recently has been in going toward ever-deeper waters and ever-more challenging environments.”
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The possibility of a boom commands particular attention now, because the industry’s faith in a limitless future has begun to diminish. The International Energy Agency — which had until recently been optimistic about oil — concluded last fall that the world has very likely already passed its peak oil production.
“The deepwater was one of the last big exploration plays on the planet,” says Gerald Kepes, a partner and head of upstream and gas at PFC Energy, a consulting firm. “We’re now looking at the second half of the global deepwater play. You can see the end of it, maybe 25 years from now.”
This is not the only way of looking at the data; other analysts, recalling the technological advances and the unforeseen finds that have marked exploration’s history, are more positive.
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But strikes of this magnitude are comparatively rare. According to United States Geological Survey data, the earth, as it was before oil companies started drilling, held between five trillion and six trillion barrels of oil, most of which has been discovered or remains inaccessible.
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“We’ve got four, five, six years left in the Gulf of Mexico,” James Painter, who leads Cobalt’s [a company that held a group of leases 50 miles from the mouth of Angola’s Cuanza River basin] team there, told me. He could imagine a couple of possibilities beyond that, but neither was perfect — there were very likely to be gas fields deep underneath the continental shelf, where high pressures make drilling very complicated, and there might be a Cretaceous play left in the gulf, though that was iffy. “In my mind, we’ve got one more shot,” he said.
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There is an element of uncertainty in every complicated engineering endeavor. “In July 2003, in the Pacific, a Japanese fishing boat was sunk by a flying cow,” Robert Bea told me. Bea is a professor of civil and environmental engineering at the University of California, Berkeley, and a leading scholar of risk; he also spent many years working in research and management at Shell. The cow, it turned out, was part of an illegal cattle shipment bound from Anchorage to Russia; as the plane approached its destination the smugglers became nervous about their cargo and began shoving it out of the plane. “No risk analysis can ever be complete. No one can predict a flying cow.”
Drilling engineers suffer from the tyrannies of darkness and depth, and these conditions limit what they can do when these systems do fail. “The real problem with going so deep is not that the possibility of failure is greater,” Bea said. “But if something does fail, the consequences are so much greater. In shallow water, you can physically contain a spill. But at this kind of depth that becomes dramatically more difficult.”
Gulf Oil Spill Commission Official to Speak on BP Disaster, Energy Future
One-half of the two-person team that led the presidential commission investigating the largest offshore oil spill in U.S. history will visit the Duke University campus on Monday, Jan. 24.
William K. Reilly, co-chair of President Barack Obama’s National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, will discuss the findings and implications contained in the 380-page report examining the 2010 Gulf of Mexico spill.
The lecture, “Deep Water: The Gulf Oil Disaster and America’s Energy Future,” will be held in the RJ Reynolds Theater in Duke’s Bryan Center. While the event is free and open to the public, tickets are required and can be reserved by contacting the University Box Office online, or calling (919) 684-4444.
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Reilly’s talk starts at 5 p.m.; a reception will follow in the adjacent Schaeffer Mall at 6:15 p.m.
The talk is presented by the Nicholas Institute for Environmental Policy Solutions and the Office of the University President. Reilly and fellow oil spill commission member Frances G. Beinecke both serve on the Board of Advisors of Duke’s Nicholas Institute for Environmental Policy Solutions, an organization devoted to helping decision makers address critical environmental challenges.
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