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Monday - evening drive time
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Part one of the digest of diaries is here and part two is here.
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The increasingly intricate legal machinations surrounding the Deepwater Horizon disaster have now gotten just a bit more complicated. The company has requested that a federal judge throw out investor claims that BP covered up and subsequently downplayed safety risks on the rig before and after the blowout that resulted in large financial losses to those investors.
BP has asked that U.S. District Judge Keith P. Ellison restrict any investor fraud claims to owners of BP America, claiming that U.S. securities laws don’t apply to holders of foreign shares, such as the company’s common stock, which trades in London, where the company is based.
The investors “seek to transform a matter involving allegedly negligent safety processes into an action for securities fraud,” BP said in its filing. Citing previous court rulings, BP said, “securities laws do not protect investors against negligence.”
Shareholders led by the pension funds of New York and Ohio are claiming billions of dollars in losses and seek recovery from BP and its directors and officers. Lawsuits over personal and economic injuries from the spill are combined in New Orleans federal court and aren’t affected by today’s request.
BP ADRs plunged 40 percent to $36.52 by June 1, 2010, from $60.48 on April 20, 2010, the day the well blew.
The investors say that by touting practices that indicated a commitment to safety while at the same time decreasing personnel, adopting equipment-related cost cutting measures, and rejecting complaints from rig workers with regard to safety problems, that BP violated U.S. securities laws by misleading investors on the potential of a major disaster. Investors also claim that BP knowingly hid the size of the blowout in the weeks after the explosion, and continued to tweak the numbers long after in a effort to reduce their financial liability.
The case is In re BP Plc Securities Litigation, 4:10-md- 2185, U.S. District Court, Southern District of Texas (Houston).
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But then, that deal with the Russians may take a little of the sting out... BP shares rally after news on stalled Russian deal.
Oil group BP PLC said Friday that an arbitral panel has issued a consent order permitting BP and the Alfa-Access-Renova (AAR) consortium to assign an Arctic opportunity to TNK-BP, subject to consent from Russian state-controlled firm Rosneft. TNK-BP is Russia's third largest oil company, with 50% held by BP and 50% held by AAR. "The order also permits the proposed share swap between BP and Rosneft to proceed subject to Rosneft having consented to assign the Arctic opportunity to TNK-BP," BP said in a statement. The interim injunction on both the share swap and the Arctic opportunity remain in place, subject to obtaining consent from Rosneft. Under a deal outlined on Jan. 14, Rosneft and BP agreed to explore and develop three license blocks on the Russian Arctic continental shelf. The terms also call for Rosneft to hold 5% of BP's ordinary voting shares in exchange for 9.5% of Rosneft's shares. AAR, however, subsequently challenged BP's deal with Rosneft and the issue was brought before an arbitration tribunal. Shares of BP rallied more than 3% in London Friday.
The order may end almost four months of legal moves begun when BP’s partners in TNK-BP challenged the Kara Sea exploration deal and share swap in court.
“This is a way forward,” said Christine Tiscareno, an equity analyst at Standard & Poor’s in London. “But it looks like AAR is calling the shots now. It makes BP look very weak.”
The arbitrators ordered the stakes would have to be for investment purposes only, with voting rights exercised by independent trustees. Neither Rosneft nor BP is allowed seats on each other’s boards, according to the statement.
“We welcome today’s developments,” Stan Polovets, the CEO of AAR, said in an e-mailed statement. “We see the Arctic transaction with Rosneft as a great opportunity for TNK-BP and for Russia.”
Rosneft CEO Eduard Khudainatov has said his company wants BP, not TNK-BP, to explore in the Arctic. Russian Prime Minister Vladimir Putin said in January that BP’s experience in the Gulf of Mexico had made it the preferred partner.
Come on, Vlad... did you really mean to say that BP's Gulf experience made it the "preferred partner"? Well, boys and girls, I believe that stance would be called an extreme case of misplaced confidence.
The jaw drops; the mind boggles...
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And Alistair Osborne of the Telegraph of London has a wonderfully uber-snarky take on the abilities of one Robert Dudley of BP fame... Despite the oligarchs' humiliation of Dudley, BP still has a deal to be done.
According to leaked documents from US diplomats, German Khan likes to attend dinner at his hunting lodge "armed with a chrome-plated pistol". But don't pick Bob Dudley, the BP chief executive.
That's one lesson from the latest instalment of Oily Bob & the 'Orrible Olis – a heart-wrenching tale of a BP oilman being repeatedly outmanoeuvred by four Ruskie billionaires. In fact, that's probably the only lesson, as everything else is conjecture. But, humiliating though it is for Bob, you have to say one thing: Dudley may, at last, have the makings of a deal.
To be clear, it is not the deal he had in mind when he dragged Energy Secretary Chris Huhne along on a Friday evening in January to unveil his "major equity-linked partnership" and "groundbreaking strategic alliance" with the Kremlin-backed Rosneft. That consisted of a $16bn (£10bn) share swap and a deal with Vladimir Putin for some thrill-a-minute Arctic exploration.
Now he's got to re-cut the whole thing to satisfy the demands of Mikhail Fridman, Len Blavatnik, Viktor Vekselberg and Khan, whose company Alfa-Access-Renova (AAR) owns the other half of BP's existing Russian joint-venture, TNK-BP.
Despite all the embarrassment, there's still a deal to be done for BP's Bob. Assuming, of course, he doesn't mess it up.
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And the hits just keep on coming... BP claims $2.067 billion from Mitsui in Macondo oil spill costs.
MOEX Offshore, an affiliate of the Japanese firm Mitsui & Co., which owned a 10 percent non-operating interest in the Macondo well, said BP is seeking reimbursement of more than $2 billion related to last year’s disaster in the Gulf of Mexico. BP has been sending the company invoices for spill-related costs based on MOEX’s ownership interest in the project.
BP has been sending invoices to MOEX Offshore periodically, setting out the amount it calculates based on the company's 10% proportionate share of the costs relating to the Macondo incident. In a notice of dispute letter received by MOEX Offshore and the block's 25% owner Anadarko Petroleum on April 4, BP said that as of February 28, 2011, MOEX owed about $1.856 billion.
Since then, MOEX has received additional invoices. "According to MOEX Offshore, although the invoices it has received, if just added together, would total a higher number, the most recent invoice dated April 5, 2011 states that MOEX Offshore's share of the expenses relating to the incident is approximately $2.067 billion," the company said.
Given the ongoing investigations into last year’s accident, which killed 11 workers aboard the Deepwater Horizon drilling rig, MOEX is withholding any payments to BP, the company said, even though BP is demanding payment in 30 days.
Both MOEX and Andarko have sued BP,claiming numerous violations of their contracts in the handling of the Deepwater Horizon operation.
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Late addition: A link to a story from earlier in the week that may have already been covered here, but it is still important. (h/t DawnN)
Health Crisis Rocks the Gulf in Aftermath of the Spill, But Feds and BP Turn a Blind Eye.
Contrary to many national stories covering the one-year anniversary of the BP oil spill in the Gulf of Mexico, a health crisis in the region has developed among exposed workers and residents. And it's not so "mysterious."
In recent meetings with public health, medical and chemical experts in Louisiana -- the Gulf state hardest hit by the worst offshore oil spill in history -- AlterNet found a striking symmetry between debilitating chronic symptoms being reported among those sickened and the known effects of chemicals in the toxic brew of oil, dispersant and burned crude to which they were exposed.
(Continue reading)
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And to try and end on a happier note:
Well, it's better in my Jeep's gas tank than attached to my hips and thighs... Crisps, pies and junk food used as new vehicle fuel.
Greenergy, which supplies a fifth of the UK's petrol and diesel, said it has started making motor fuels from food waste, after initially feeding its plant with pure cooking oil.
The company only uses food that can't be sold, because the products are mis-shapen, past their sell by date or overcooked. The best ingredients are pies, pasties and crisps for their high fat content.
Greenergy is in a partnership with Brocklesby, a specialist in recycling edible oils that would previously have gone to landfill or compost, are now being converted for biofuel and energy production.
Andrew Owens, chief executive of Greenergy, said: "The quantities of biodiesel that we're currently producing from solid food waste are small, but we're expecting to scale up so that this soon becomes a significant proportion of our biodiesel.
"To put it into context, just one of these new facilities could handle enough waste pies or crisps to fill a cruise ship. With multiple plants, the potential for this kind of technology to reduce fuel emissions is considerable."
Material left after oil extraction is dried to be used as compost. Do I smell cheese danish or did you just fill up?
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PLEASE visit Pam LaPier's diary to find out how you can help the Gulf now and in the future. We don't have to be idle! And thanks to Crashing Vor and Pam LaPier for working on this!
Previous Gulf Watcher diaries:
The last Mothership has links to reference material.
Previous motherships and ROV's from this extensive live blog effort may be found here.
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