Alabama Sues BP, Transocean, Halliburton over Gulf Oil Spill

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Alabama Sues BP, Transocean, Halliburton over Gulf Oil Spill
Alabama AG Sues BP, Transocean, Halliburton For “Catastrophic” Gulf Oil Spill
Friday, August 13, 2010

••• The U.S. state of Alabama is suing BP and Transocean for damages sustained from the Gulf of Mexico oil leak.

‘We are making this claim because we believe BP has inflicted catastrophic harm,’ said the state’s attorney general, Troy King.

‘We are suing them for the amount it will take to make Alabama whole.’

Mr. King did not name a figure.

Sky’s U.S. correspondent Robert Nisbet said: ‘This is particularly interesting within the state of Alabama because the state’s governor (Bob Riley) disagrees with the attorney general’s course of action. He wants to wait to see what compensation BP offers first.’

King defended his decision, arguing that it put the state in the strongest legal position.

Nisbet added: ‘Some 300 federal lawsuits have already been filed against BP and other companies involved in this spill in over 12 states – so a huge amount of legal complication and difficulty now facing BP.’
Louisiana sustained the most damage to its coastline and waters from the oil spill that began in April and was plugged with cement on July 15.

But oil also damaged the economies of Mississippi, Alabama and Florida.

Alabama’s suit also names Anadarko Petroleum Corp, among others. ‘It is believed the explosion on the Deepwater Horizon was a blowout relating to the cementing work,’ according to the suit.

On the leak itself, meanwhile, National Incident Commander Thad Allen says they are still deciding when to resume work on the relief well.

Ambient pressure tests on the temporary, ‘static kill’, solution had been completed, he said, and those results suggest pressure is being maintained – although there is minor leakage from the flange.

However, they are concerned that proceeding with the ‘bottom kill’, the final cement plug using the relief well, could disrupt what they have done already and create increased pressure. More tests will be conducted.
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BP Agrees to Record $50.6 Million Fine for Texas City Blast

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BP Agrees to Record $50.6 Million Fine for Texas City Blast
Thursday, August 12, 2010

••• BP has agreed to pay a record $50.6 million fine related to the deadly 2005 blast at its Texas City refinery and spend $500 million on safety improvements, U.S. officials said on Thursday.

The fine relates to BP’s repeated failure to meet safety standards both before and after the explosion that killed 15 workers and injured 170 others.

BP has also been slapped with huge fines for the pollution released from the troubled facility.

Those fines pale in comparison to the billions the British energy giant is liable for in the wake of the massive oil spill unleashed in the Gulf of Mexico after a deadly explosion sank the BP-leased Deepwater Horizon drilling rig in April.

The Occupational Safety and Health Administration initially fined BP a record $21 million after it determined that BP failed to protect its workers ahead of the 2005 blast.

The penalty was increased to $50.6 million in 2009 after inspections found that BP failed to correct significant safety deficiencies.

‘This agreement achieves our goal of protecting workers at the refinery and ensuring that critical safety upgrades are made as quickly as possible,’ said Secretary of Labor Hilda Solis.

‘The size of the penalty rightly reflects BP’s disregard for workplace safety and shows that we will enforce the law so workers can return home safe at the end of their day.’

The settlement does not impact ongoing litigation over the $30 million fine imposed for 439 new ‘willful violations’ discovered in the 2009 inspection.

‘It is perfectly within BP’s means to make that facility safe,’ OSHA Deputy Assistant Secretary Jordan Barab said in a conference call.

The settlement ‘commits them to a schedule to address those issues and it provides OSHA with an unprecedented level of oversight to make sure they do what they’re supposed to do,’ he added.
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Recovery still distant as GM turns a corner

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Recovery still distant as GM turns a corner
General Motors profits move past $1 billion
Thursday, August 12, 2010

••• General Motors said on Thursday its profits hit $1.3 billion in the second quarter, as the car company prepared to break free of U.S. government ownership by relisting on the stock exchange.

‘I am pleased with our progress on achieving our business objectives,’ said chief financial officer Chris Liddell, announcing the second consecutive quarter of growth.

The company erased a loss of $13 billion in the same period last year, as sales and revenues increased.

The firm saw stronger sales in North America in the quarter, even as sales in Europe floundered and market share around the world sank.

GM captured 15.4 percent of the U.S. market for cars versus 17.5 percent in the second quarter of last year, but elsewhere faired poorly.

GM’s executives have said that a public offering will come soon, a process that will help the U.S. government unwind its majority stake in the firm.

The U.S. Treasury Department still owns 61 percent of GM, which received $50 billion of U.S. government financing for its bankruptcy restructuring that led to mass layoffs, plant closures and billions of dollars in debt wiped out.

GM’s drive for an IPO will be boosted by news that the firm’s revenues swelled to $33 billion in the second quarter, a third more than the same period last year.

GM as well as its U.S. competitors Ford and Chrysler were hard hit by the recession which struck the United States in December 2007, caused by a home mortgage meltdown.

Of the so-called Detroit Three car makers, Ford was the only one to avoid bankruptcy, managing to stay afloat thanks to massive loans it had obtained prior to the credit crunch and because it moved more quickly to revitalise its product portfolio.
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Fed Effort to Aid Recovery Fails to Calm Investors

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Fed Effort to Aid Recovery Fails to Calm Investors
Thursday, August 12, 2010

••• More worried about the recovery, the U.S. Federal Reserve has taken a small step to bolster the U.S. economy.

Wrapping up a one-day meeting, the Fed said it will use money from its investments in mortgage securities to buy government debt on a small scale. That could help nudge down long-term rates on mortgages and corporate debt, but wouldn’t have a dramatic impact on stimulating economic growth, economists say.

Perhaps more importantly, the largely symbolic action sends a signal that the Fed sees the recovery weakening and that it stands ready to take more aggressive action, if needed, to keep it on track.

Delivering a more downbeat assessment, the Fed now believes economic growth will be ‘more modest’ than it had anticipated at its late June meeting.

The Fed, citing ‘subdued’ inflation, said it would keep its target for a key interest rate at zero to 0.25 percent for an ‘extended period’.
Investors reacted positively to the statement. Stocks that were down sharply before the announcement made up some lost ground. The Dow Jones industrial average, down about 100 points just before the Fed decision, was down about 40 a short time later. However, the market was likely to fluctuate, as it usually does while investors pore over the Fed’s statement.

Treasury prices rose slightly as investors were pleased by the Fed’s plan to buy government debt, which would reduce the amount of Treasury securities in the market. The yield on the Treasury’s 10-year note, which moves in the opposite direction from its price, fell to 2.77 percent from 2.82 percent just before the announcement.

Economists doubt the Fed can turn around the economy on its own. Some believe additional help from Congress is needed. Others are sceptical that easier credit or even more government aid will persuade Americans to shop more and hire more. Yet others think some jobs – like in construction – will never return to pre-recession levels, as the economy makes a structural shift.
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Brazil seeks origin of oil slick lapping at beach

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Brazil seeks origin of oil slick lapping at beach
Monday, August 10, 2010

••• A large oil slick reached beaches along the Atlantic Ocean in the Lakes Region in the north of the Brazilian state of Rio de Janeiro, local media reported early Monday.

The origin of the oil was not immediately known, and naval inspection technicians took samples of the water and the sand to determine if the fuel comes from a ship or an offshore platform. The relevant tests, however, could take up to 20 days.

Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said it’s not responsible for an oil spill that appeared on five of the country’s beaches.
Petrobras, as the oil producer is known, is assisting Brazil’s Navy with clean-up efforts, a spokesman, who declined to be named because of the Rio de Janeiro-based company’s policy, said today in a telephone interview. Petrobras did a flyover and wasn’t able to spot any oil slick, he said.

Oil washed up today at five beaches, said a spokeswoman at the Rio de Janeiro state government environment agency. Petrobras is helping to investigate the spill’s origin, said the spokeswoman in a telephone interview. She can’t be named under internal policy.

The size of the spill hasn’t been determined yet, she said.

The affected beaches are near Cabo Frio, about 93 miles east of the city of Rio de Janeiro.
The leak in Rio comes after Brazilian President Luiz Inacio Lula da Silva strongly criticized the oil giant BP over the disaster caused by its well in the Gulf of Mexico. He said such a disaster would never happen in Brazil. According to Lula, the technology used by Brazil’s state-operated oil company Petrobras is superior to that which is used in the United States.
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BP Prepares for Final Drilling Phase

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BP Prepares for Final Drilling Phase
Monday, August 9, 2010

••• BP today advanced on what it hopes is the final lap towards permanently killing the source of the world’s worst offshore oil spill and kicked off a $20 billion compensation fund with a first $3 billion deposit.

A relief well being drilled by BP is on track to start this week to provide a definitive “bottom kill” shutdown of the crippled Gulf of Mexico well, unless an approaching weather system disrupts the timing, the top U.S. oil spill response chief said.

The biggest environmental response operation ever launched in the United States passed a critical milestone last week by subduing the blown-out deep-water well with injections of heavy drilling mud, followed by a cement seal.

BP’s Macondo well, 1 mile down in the Gulf of Mexico, had been provisionally capped on July 15th after spewing an estimated 4.9 million barrels of oil into the Gulf, soiling marshlands, fisheries and tourist beaches along several hundreds of miles of the Gulf Coast.

But the relief well is regarded as the final solution to plug the well 2.5 miles beneath the seabed.

“They are closing in on the last 30-40 feet . . . it’s ongoing and going in segments,” response chief retired Coast Guard admiral Thad Allen said in an update on the relief well. “We expect that sometime before the end of the week we will be able to . . . commence the kill,” he told a conference call.
As the deep-water engineering operation progressed, BP said it was also moving to fulfill its public commitments to compensate for economic damage caused by the spill.

Mr. Allen said the spill response authorities were closely watching a tropical weather system moving east over the Florida peninsula, which forecasters see crossing in a few days near BP’s Deepwater Horizon spill site.

He said that depending on its strength and direction, this system could affect the timing of the relief well “bottom kill” operation. Forecasters were giving this disturbance a 30 percent chance of strengthening into a tropical cyclone.

Elsewhere, BP said it had made an initial deposit of $3 billion into a $20 billion escrow fund.

The chief executive of BP’s Gulf Coast Restoration Organization, Bob Dudley, said the $3 billion initial contribution to the escrow fund was intended to back up the company’s repeated pledge to “make good” economic losses caused by the spill to Gulf Coast fishermen, tourism operators and home owners.

“Establishing this trust and making the initial deposit ahead of schedule further demonstrates our commitment to making it right in the Gulf Coast,” Mr. Dudley said in a statement.

The U.S. Justice Department confirmed the contribution, saying it had completed negotiations with BP on the fund.
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First 3D Porn movie being shot in Hong Kong

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First 3D Porn movie being shot in Hong Kong
Sunday, August 8, 2010

••• A group of Hong Kong filmmakers have started shooting what they claim will be the world’s first 3D pornographic film, a report said on Sunday.

The $3.2 million 3-D Sex and Zen: Extreme Ecstasy, set for release in May, has already generated interest in a host of Asian film markets, as well as Europe and the U.S., the Sunday Morning Post reported.
Loosely based on a piece of classical Chinese erotic literature, The Carnal Prayer Mat, the movie will star Japanese adult actresses Yukiko Suo and Saori Hara, the Post said.

The film chronicles the story of a young man who, after being introduced to the erotic world of a duke, realises his ex-wife is the love of his life and features ‘orgies, swinging and some very graphic sex scenes’, the paper said.
Producer Stephen Shiu acknowledged that censors would likely block the movie’s screening in mainland China, a key market for Hong Kong filmmakers.

‘(But) we are almost closing deals with some markets including Japan, Korea, Southeast Asia and some pay TV channels in Hong Kong,’ Shiu told the paper.

Italian director Tinto Brass has announced he would produce a 3D remake of his 1979 erotic film Caligula, while Hustler plans to release a pornographic spoof of 3D science fiction film Avatar, the top-grossing movie of all time which has earned about $2.7 billion worldwide since its release.
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BP begins to seal runaway well in Gulf of Mexico

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BP begins to seal runaway well in Gulf of Mexico
Thursday, August 5, 2010

••• BP has begun sealing its runaway oil well in the Gulf of Mexico with cement, one of the final steps to plug the gusher at the center of the worst U.S. environmental disaster on record.

Some 15 weeks after the well ruptured and 21 days after the flow was stemmed with a temporary cap, the massive slick which once stretched for hundreds of miles is rapidly disappearing from the Gulf.

But officials cautioned that a great deal of clean-up work remained and that the long-term impact of the disaster could be felt for years, even decades.

In a long-awaited breakthrough, BP brought the well under control on Wednesday after pumping heavy drilling fluid into the busted Macondo well for eight hours, forcing the oil back down into the reservoir miles beneath the seabed.

The British energy giant then began pumping cement at 09.15 CDT on Thursday after the procedure was approved by U.S. officials.

‘The aim of the procedure is to assist with the strategy to kill and isolate the well,’ BP said in a statement. ‘This procedure will complement the ongoing relief well operation.’

In giving the green light, spill response chief Thad Allen emphasised that the cementing should ‘in no way delay the completion of the relief well,’ expected to be finished in mid-August to seal the well permanently.
‘So, the long battle to stop the leak and contain the oil is finally close to coming to an end. And we are very pleased with that,’ U.S. President Barack Obama said. ‘Our recovery efforts, though, will continue. We have to reverse the damage that’s been done.’

It took 106 days to shut the well down in the wake of a devastating explosion on April 20 that killed 11 workers and sank the BP-leased Deepwater Horizon rig, unleashing a torrent of oil into the Gulf.

At 4.9 million barrels – or enough oil to fill 311 Olympic-sized swimming pools – the disaster is the biggest maritime spill on record.

It threatened the fish and wildlife-rich U.S. Gulf coast with environmental ruin and plunged residents of coastal communities into months of anguish over their livelihoods and the region’s future.

A government report released on Wednesday found that a third of the oil was captured or mitigated through burning, skimming, chemical dispersion and direct recovery from the wellhead.

Heat from the sun helped some of the chemicals in the crude evaporate. Waves and currents broke the slick up into smaller patches. Then the microbes which feed on natural oil seeping in the Gulf got to work, it said.

‘At least 50 percent of the oil that was released is now completely gone from the system,’ said Jane Lubchenco, head of the National Oceanic and Atmospheric Administration.

‘And most of the remainder is degrading rapidly, or is being removed from the beaches.’
But Lubchenco was quick to stress that scientists will not be able to determine for a long time the full extent of the damage.

‘The oil that was released and has already impacted wildlife at the surface, young juvenile stages and eggs beneath the surface, will likely have very considerable impacts for years and possibly decades to come,’ she told reporters at the White House briefing.

The problem, she explained, is that oil is still toxic even when it has been broken down into very small droplets.

About 24 percent of the Gulf’s federal waters remain closed to fishing, and even when fishermen are able to fill their nets they fear consumers might not believe the seafood is safe to eat.

With tourists likely to avoid Gulf beaches for years and oil industry jobs under threat from Obama’s moratorium on new deep sea drilling permits, the future remains bleak for many coastal communities.

BP, meanwhile, is hoping to rebuild its shattered reputation but must also meet the claims of thousands of individuals and businesses whose livelihoods have been washed away, while a mammoth civil trial looms.

BP senior vice president Kent Wells expressed relief that 20 days after the flow of oil in the sea was stemmed with a temporary cap ‘it’s very difficult for us to find any oil anywhere on the surface.’

He refused, however, to declare victory until the well is permanently sealed.
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News Corp. Posts $875 Million Profit as Ad Sales Rise

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News Corp. Posts $875 Million Profit as Ad Sales Rise
Wednesday, August 04, 2010

••• Media and entertainment giant News Corp. reported, Wednesday, that it has swung to profit in the fiscal fourth quarter on the back of strong performance from its television networks division which posted impressive ad sales.

News Corp. said its net profit in June quarter was $875 million or $0.33 per share as against loss of $203 million or $0.08 per share in the year ago period.

The company said its revenue moved up 5.7 percent to $8.11 billion.

Analysts, on average, had expected News Corp. to report profit of $0.20 per share on revenue on $7.87 billion.

However, operating profit, or sales minus the cost of goods sold and administrative expenses, slipped 1.7 percent year-on-year in June quarter to $932 million from $948 million.

The media conglomerate said its earnings were driven by strong performance put up by its television networks division, which accounted for more than half of its operating income.

Profits at domestic channels surged by 30 percent while international channels improved 40 percent. Overall, operating profit at cable television networks division, which include channels such as Fox News Channel and FX, surged 31 percent to $563 million on the back of advertising revenue which jumped 11 percent. The division also saw double-digit growth in revenue from fees paid by cable, satellite and fiber video providers.

Operating profit at News Corp.’s broadcast television division also surged 13 percent to $113 million on improved ad sales offsetting higher programming expenses at the company’s national broadcast network – Fox Broadcasting.

The group’s filmed entertainment division also did well but could not beat third quarter performance. Operating income in June quarter dropped 32 percent year-on-year to $137 million. In March quarter, profit stood at $497 million. At the time of announcing third quarter earnings, News Corp. had warned that one should not expect stellar performance from this division in the fourth quarter, largely due to an expected year-over-year decline in the film business due to the timing of releases.

The newspapers and information services division, which include the Wall Street Journal, Barron’s, MarketWatch and Dow Jones, also reported 20 percent surge in profit to $115 million on higher ad revenue, though it was below Street estimates.

The company’s digital media division, which include social networking site MySpace, however, disappointed, reporting an operating loss of $174 million in the June quarter on lower search and advertising revenue. News Corp. said MySpace is set for a “major overhaul.”

News Corp.’s satellite TV division also disappointed, reporting a 37 percent slide in operating income to $97 million on the back of continued weakness at Sky Italia.

To reduce dependence on the economically sensitive advertisement-based revenue, News Corp. said it is beefing up its portfolio of subscription-based assets. In June, it said it has made a bid for the 61 percent stake of pay-TV operator British Sky Broadcasting Group Plc (BSkyB) it doesn’t already own.

“The opportunity for us to expand the scale of our franchises is significant, including through taking advantage of the continual technological advances that will broaden the reach of our core content and distribution businesses,” News Corp. CEO Rupert Murdoch said in a statement.

The company’s full-year results were more impressive.

News Corp. said its net profit in fiscal year 2010 was $2.5 billion, helped primarily by blockbuster movie “Avatar.” DVD sales of other films like “Ice Age: Dawn of the Dinosaurs,” “X-Men Origins: Wolverine” and “Night at the Museum: Battle of the Smithsonian” also bumped up its profits. In the prior year, News Corp. incurred a net loss of $3.4 billion, which included a one-time pre-tax impairment and other charges of $9.2 billion.

“These results underscore just how well positioned we are – fiscally, operationally and strategically – for further growth across all of our markets,” Murdoch said.

Shares of News Corp., which owns Dow Jones, Wall Street Journal, New York Post, MySpace and 20th Century Fox among other things, closed up 1.61 percent at $13.85. Following the financial results announcement, the company’s shares were up 3.25 percent in the after-market hours.
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• Source(s): News Corporation

BP says “static kill” operation at ruptured U.S. oil well

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BP says “static kill” operation at ruptured U.S. oil well
Obama says long battle in Gulf close to end
New Report: 74% of Oil in BP Deepwater Horizon Oil Spill has been Contained or Mitigated
Wednesday, August 04, 2010

••• About three-quarters of the oil spilled from the ruptured BP well in the Gulf of Mexico has disappeared, a top U.S. official said Wednesday.

‘The scientists are telling us about 25 percent was not captured or evaporated or taken care of by mother nature,’ said Carol Browner, a top energy adviser to U.S. President Barack Obama, on the ABC network’s Good Morning America program.

‘This is an initial assessment by our scientists in the government and outside the government. We think it’s important to make this available to the public. That’s what we’ll be doing today.’

Browner said the report to be released later on Wednesday was ‘encouraging’ but that more clean-up will be needed.

‘Mother nature will continue to break it down,’ she said.

‘But some of it may come onshore, as weathered tar balls. And those will be cleaned up. They can be cleaned up. And we will make sure they are cleaned up.’

An estimated 4.9 million barrels of oil leaked into the Gulf of Mexico over a period of 87 days after an explosion on a BP-leased offshore rig on April 20.

The leak was capped on July 15, and on Wednesday BP said it succeeded in controlling the pressure in the ruptured well through a procedure called a ‘static kill.’

The New York Times said the report from the National Oceanic and Atmospheric Administration, indicated that fears that a huge underwater glob of oil would surface at some point to tar Gulf beaches looked increasingly unlikely.

‘There’s absolutely no evidence that there’s any significant concentration of oil that’s out there that we haven’t accounted for,’ Jane Lubchenco, head of the agency, was quoted as saying.

Today, a panel of government scientists released a report which said that the vast majority of the oil from the Deepwater Horizon oil spill has either evaporated or been burned, skimmed, recovered from the wellhead or dispersed much of which is in the process of being degraded. A significant amount of this is the direct result of the federal government’s aggressive response to the spill.

The chart below outlines the breakdown of what has happened to the oil released into the Gulf of Mexico since the oil spill began in April:

These interagency findings were generated using a scientific tool called the Oil Budget Calculator, which employs a combination of direct measurements and the best scientific estimates available. The calculator is based on 4.9 million barrels of oil released into the Gulf, the government’s latest estimates of the flow rate from Monday. More than 25 of the best government and independent scientists contributed to or reviewed the calculator and its calculation methods. Scientists from the National Oceanic and Atmospheric Administration (NOAA), the Environmental Protection Agency (EPA) and the Department of Energy (DOE), as well as academic scientists are continuing to work to refine these calculations.

While we welcome the news contained in this report, we continue to be extremely concerned about what this oil spill means for the health of the Gulf ecosystem and the millions of people who depend on the Gulf for their livelihoods and enjoyment. To that end, our response effort will continue until the well is killed, the oil is cleaned up and until all of the people are made whole again.

For more information about the ongoing Administration-wide response to BP Oil Spill, visit RestoreTheGulf.gov.
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MasterCard 2Q profit jumps 31 percent, tops view

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MasterCard 2Q profit jumps 31 percent, tops view
Wednesday, August 04, 2010

••• Anaemic consumer spending in the U.S. was offset by strong international growth to help boost MasterCard Inc’s second-quarter profit by 31 percent.

The gain topped Wall Street profit expectations, but fell short of the 38 percent leap in operating income posted by the company’s larger rival, Visa Inc., last week.

MasterCard shares slipped $1.76, to $200.70 in midday trading as the broader market sputtered.

MasterCard’s gains showed the Purchase, NY-based payment processor’s reliance on overseas use of its cards and networks. Worldwide purchasing volume rose eight per cent, while U.S. purchasing volume eked out a gain of less than 1 percent.

Worldwide, credit card use rose 10 percent, while debit card use leaped 29 percent.

Chief Financial Officer Martina Hund-Mejean said in an interview that card use was particularly strong in Latin America and Asia Pacific, which both saw double-digit growth rates.

‘Even in Europe,’ she said, alluding to the economic turmoil on the Continent in recent months. ‘We do not see any significant impact on our numbers in terms of the Europeans not spending.’

U.S. credit card use edged down 1.5 percent, continuing a two-year decline, but showing the smallest drop since the third quarter of 2008.

Debit card use edged up less than 1 percent. That reflects more frequent use of debit cards, but was held down by MasterCard’s loss of several debit card deals with banks, most notably the former Washington Mutual, which was bought by JPMorgan Chase in 2008. Hund-Mejean said US debit growth was closer to 20 percent if the banks winding down their MasterCard programs are stripped out.

U.S. spending, particularly with credit cards, picked up in April but was less robust later in the quarter, Hund-Mejean said. ‘People still feel a little careful and cautious, and I think that’s what we saw in May and June,’ she said.

Analysts noted the growth compared with a weak quarter last year. Thomas McCrohan from Janney Capital Marketssaid it is hard to read into the results to say whether they indicate any real improvement in the economy. But there was ‘nothing alarming’ in the results.

‘There’s nothing that would support a double dip’ of the recession, McCrohan said.

The number of transactions MasterCard handled was basically flat at 5.6 billion. Cross-border volume jumped 15.2 percent.

Net income rose to $458 million, or $3.49 per share, compared with $349 million, or $2.67 per share, a year ago.

Revenue rose 7 percent to $1.37 billion from $1.28 billion in the 2009 second quarter. MasterCard said the revenue increase reflected the higher cross-border volumes, higher gross dollar volume of the transactions it processed and the impact of price increases of 4 percent.

Wall Street expected earnings of $3.33 per share on revenue of $1.38 billion.

Total operating expences dropped 10 percent to $648 million. The decrease was led by a drop in severance and compensation costs as a result of layoffs in 2009.

President and CEO Ajay Banga said it is too early to tell what results MasterCard will feel from the limits on debit card fees included in the financial overhaul bill signed by President Barack Obama last month.

‘I know that everybody is eager to fully understand the impact on our business, but the truth is we just have to wait for the (Federal Reserve) to develop the regulations, and for our customers to react, before we will know the full implications both for the industry and for our company,’ he said during a conference call.

Banga noted there are a number of options for implementing the new rules, and quipped that MasterCard benefits in this case from having a smaller market share of U.S. debit than Visa.

Regardless of the new regulations, Banga said he doesn’t see the shift from cash and checks to electronic payments slowing down. He spoke enthusiastically about a number of pilot projects and overseas ventures MasterCard has to expand its network beyond card payments. Deals the company struck on mobile payments in Latin America, money transfer services in China and contactless payments in the U.S. position MasterCard for continued growth as the payments market evolves, he said.

David Parker, an analyst with Lazard Capital Markets, said it will be a few years before ‘electronic wallets’ are a reality, and there are some challenges in terms of customer and merchant adoption, but it is clear the market is moving in that direction.

MasterCard’s investments in this area could help it overcome its disadvantage in debit cards.

‘I think there is an opportunity there with mobile commerce,’ he said.
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BP Agrees to Sell Colombian Business to Ecopetrol and Talisman

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BP Agrees to Sell Colombian Business to Ecopetrol and Talisman
Tuesday, August 03, 2010

••• British oil giant BP says it will sell its Colombian business for a total of $1.9 billion.

The divestment is part of BP’s recently announced plans to sell off up to $30 billion of assets, as it struggles with the soaring cost of the Gulf of Mexico oil spill disaster.

‘BP today announced that it has agreed to sell its oil and gas exploration, production and transportation business in Colombia to a consortium of Ecopetrol, Colombia’s national oil company (51 percent), and Talisman of Canada (49 percent),’ it said in a statement.
‘The two companies will pay BP a total of 1.9 billion dollars in cash… for 100 percent of the shares in BP Exploration Company (Colombia) Limited (BPXC), the wholly-owned BP subsidiary company that holds BP’s oil and gas exploration, production and transportation interests in Colombia.’

The transaction, which is subject to regulatory and other approvals, is expected to complete by the end of 2010.

News of the sell-off comes one week after BP’s vilified chief executive Tony Hayward resigned in the wake of a record second-quarter loss of $16.9 billion – the biggest quarterly loss in British corporate history.

Hayward will step down in October and hand over the reigns to American executive Bob Dudley.
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• Source(s): BP PLC

BP gears up to plug ‘world’s biggest’ oil spill

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BP gears up to plug ‘world’s biggest’ oil spill
A deadly addiction: figures confirm BP spill is biggest in history
Tuesday, August 03, 2010

••• The U.S. government says BP’s ruptured well in the Gulf of Mexico gushed an estimated 4.9 million barrels of oil, making it the largest accidental spill ever.

‘Overall, the scientific teams estimate that approximately 4.9 million barrels of oil have been released from the well,’ the joint response command that includes BP and the U.S. government said in a statement describing the new estimate.

‘Not all of this oil and gas flowed into the ocean; containment activities conducted by BP under US direction captured approximately 800,000 barrels of oil prior to the capping of the well,’ they said.

The 4.9 million barrels is at the upper end of an earlier official estimate, which said that between 3 million and 5.3 million barrels had spewed from the well between April 20, when the BP-leased Deepwater Horizon rig exploded, and July 15, when a cap placed over the wellhead was finally sealed.

The refined estimates ‘are the most accurate to date and have an uncertainty of plus or minus 10 per cent’, according to the statement.

The 4.1 million uncontained barrels estimated to have spewed into the water make the spill the biggest accidental oil disaster in the history of the petroleum industry, and second only to the intentional release of crude by Iraqi forces during the 1991 Gulf War.

The previous largest accidental spill was a 1979 disaster – also in the Gulf of Mexico – in which 3.3 million barrels gushed from the Ixtoc-1 well after an explosion on a rig operated by Mexican state oil company Pemex.
The BP spill revision was based on ‘new pressure readings, data and analysis’ of oil reservoir modeling studied by teams comprised of federal and independent U.S. scientists, including a Department of Energy team of scientists led by President Barack Obama’s energy secretary, Steven Chu, the statement said.

‘The revised estimates are part of this administration’s ongoing commitment to ensuring that we have the most accurate information possible,’ Chu said.

When the well first ruptured, ‘62,000 barrels of oil per day were leaking from the well’, beyond the 35,000 to 60,000 barrels most recently estimated by U.S. authorities, but the flow rate decreased to 53,000 barrels per day just before the well was capped, the statement said.

‘As a result of depletion of the hydrocarbon reservoir, the daily flow rate decreased over the 87 days prior to the well’s closure,’ according to the statement.

The new figures are based in part on analysis of high-resolution videos taken by remotely operated underwater vehicles, acoustic technologies, measurements of oil collected by vessels on the surface, and readings of pressure measurements inside the containment cap.

‘Government scientists will continue to analyse data and may in time be able to further refine this estimate,’ the statement said.
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BP begins ‘static kill’ operation in bid to finally seal Gulf of Mexico oil well

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BP begins ‘static kill’ operation in bid to finally seal Gulf of Mexico oil well
The key lesson of the BP oil spill? Don’t panic spiked’s prediction that this was not ‘the worst environmental disaster’ in U.S. history has been proven right.
Monday, August 02, 2010

••• BP will know within hours on Tuesday whether its attempt to plug the Macondo well in the Gulf of Mexico has worked.

Company engineers are preparing to pump heavy drilling mud and cement into the well in a procedure known as “static kill”.

Retired coast guard admiral Thad Allen, the U.S. official overseeing the federal spill response, said that the operation would begin either Monday night or early Tuesday morning.

A week later, mud and cement will be pumped in from below, via a relief well that has been dug deep into the earth, to seal the leak permanently.

Oil has stopped gushing from the well for the past two weeks after a temporary cap was placed on top of it. BP’s Deepwater Horizon rig exploded and sank on 20 April, causing what is thought to be the U.S.’s worst environmental disaster in history.
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Doug Suttles happy to eat Gulf seafood

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Doug Suttles happy to eat Gulf seafood
BP executive ‘absolutely’ would eat Gulf seafood
Monday, August 02, 2010

••• One of BP’s top executives said that not only would he eat Gulf seafood, but he would feed it to his family too. While many fear that the unprecedented amount of chemical dispersants, such as Corexit, in the water has turned it into a toxic soup, more water has been opened.
Fears run high, but many in the seafood industry give a different point of view. While acknowledging the amount of toxic chemicals (over 1 million gallons of Corexit) is unprecedented and unlike anything ever seen before; the rigorous testing by the EPA, NOAA and U.S. Fish and Wildlife fisheries have caused some to conclude that seafood is safer than it has ever been.
Water tests, air quality samples and soil tests have been conducted regularly and the data is used to determine which federal and state waters would be closed or opened. With the high amount of testing, some feel the seafood is the safest it’s been.
Others disagree. They want to know exactly what is being tested. What byproducts result from Corexit and oil and are they being tested in the seafood?
Though NOAA has opened more federal waters and people are returning to beaches, there are many who will not eat Gulf Coast seafood, regardless of what Doug Suttles chooses to feed his family.
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Final efforts to permanently seal BP oil well in Gulf of Mexico begin soon

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Final efforts to permanently seal BP oil well in Gulf of Mexico begin soon
Static kill could start Monday, Allen says
Monday, August 02, 2010

••• After months of uncertainty and frustration, crews are ramping up efforts to permanently seal the ruptured Gulf of Mexico oil well as early as Monday night.

The operation is one of two bids to definitively ‘kill’ the damaged well, which has spewed noxious crude into the sea since April, devastating fragile habitats and bringing financial ruin to many residents along the U.S. Gulf Coast.

BP officials in recent days said they hoped the ‘static kill’ operation would take place on Tuesday, but on Sunday the U.S. point man for the spill response, Coast Guard admiral Thad Allen, said it ‘could start as early as Monday night, depending on final testing of the mud injection systems’.

If successful, the ‘static kill’ will allow crews to plug the well from above with cement, but the procedure is untested and similar to a previous ‘kill’ attempt that failed at the end of May.

Still, 104 days into the spill, Americans are desperate for a sign that the leak will soon be permanently capped, allowing the full focus of BP and government officials in the region to shift to clean-up operations and repairing the economic damage caused by the worst oil disaster in U.S. history.

Somewhere between three million to 5.3 million barrels leaked into the Gulf between April 20 and July 15, when a cap placed over the wellhead was sealed, fully containing the flow of oil for the first time.

Locals are eager to see the well plugged for good, but there are fears that a successful kill operation will prompt a mass exodus of officials brought into the region to respond to the crisis.

Crews have already begun collecting some of the millions of feet of protective boom after skimming vessels said they were having difficulty finding spilled crude on the sea surface anymore.

But the president of Plaquemines Parish in Louisiana told CNN it was too early to scale back those operations.

‘The oil is out there,’ Billy Nungesser insisted, saying that he had ordered his parish sheriff to stop 12 trucks carrying boom from leaving the area.

BP, which leased the Deepwater Horizon rig that exploded on April 20, killing 11 workers and sparking the spill, has sought to reassure residents it will remain engaged and work to restore the area.

‘We’ve had some good news on the oil … but that doesn’t mean we’re done. We’ll be here for years,’ said Bob Dudley, an American chosen to replace the gaffe-prone Briton Tony Hayward as BP’s chief executive, as the energy giant tries to salvage what is left of its reputation.

Many fishermen whose grounds were closed in the wake of the spill due to food safety concerns have found work assisting the clean-up effort, but face an uncertain future.

They could soon lose their jobs again as there is less oil to mop up and there are no guarantees they will be able to return to fish soon in Gulf waters that could be contaminated for months or even years to come.

Documents released by Congress on Saturday detailing the use of chemical dispersants in the Gulf added to concerns about the long-term effects for the region.

‘BP carpet-bombed the ocean with these chemicals, and the Coast Guard allowed them to do it,’ said Democratic Representative Edward Markey, chairman of the House energy and environment subcommittee.
BP and the U.S. response team have said more than 1.8 million gallons of dispersants have been used to break up the oil, but Markey said studies show the amount could be far higher.

‘The validity of those numbers are now in question,’ he said.

Admiral Allen addressed the concerns on Sunday, insisting to reporters that he was ‘satisfied that dispersants were only used when needed’, and that it was the U.S. government on-scene coordinator’s decision to use dispersants and not BP’s.

Meanwhile on Sunday engineers were carrying out final tests to ensure the integrity of the wellhead, BP said.

Once the static kill is underway, engineers will pump heavy drilling fluid called ‘mud’ into the cap in a bid to push the oil back down into the well reservoir.

If that works, crews will then seal the well from the top with cement.

Then, as early as next weekend, BP plans to begin a ‘bottom kill’ by intercepting the damaged well deep below the seabed with a nearly completed relief well.

Engineers plan to first drill into the pipe to check the ‘static kill’ has worked before cementing in the outer well bore and blocking the oil reservoir once and for all.
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U.S. Owners Of BP Stations Seek Rebranding

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U.S. Owners Of BP Stations Seek Rebranding
Sunday, August 1, 2010

••• BP is reportedly facing pressure to rename its U.S. petrol stations under their old Amoco brand as the backlash in America shows no sign of easing.

The distributors who control most of BP’s U.S. forecourts are pushing the group to revert back to the traditional American Amoco branding for fear of further sales pain following the Gulf of Mexico oil spill, according to The Sunday Telegraph.

BP shed the Amoco brand shortly after merging with the U.S. oil group in 1998, but the 475 distributors believe its revival across petrol stations could help bring customers back.

They are reportedly seeing sales fall by up to 40 percent in the worst hit sites as Americans shun the BP brand.

The firm’s petrol stations in the U.S. are also said to be suffering growing instances of vandalism and protests.

John Kleine, executive director of the BP Amoco Marketers Association, which represents U.S. distributors, told The Sunday Telegraph in Britain: ‘They (the distributors) are interested in where the brand is going and want it to be returned to its premier place.’
He added: ‘Those fires have been fueled in the last week by a former Amoco executive (Bob Dudley) being named to assume the role of chief executive.’

A separate report also suggested BP may be forced to wind down its operations in the Gulf of Mexico after American lawmakers passed a bill that could halve its production there.

The Gulf accounts for 10 percent of BP’s global production, but the legal move proposed freezing the firm out of new drilling leases for seven years.

BP last week confirmed Mr. Dudley would take over from under-fire boss Tony Hayward in October as it revealed a $32.2 billion blow from the spill.

The group is understood to be preparing to ‘static kill’ the leaking well this week.

The well erupted when the Deepwater Horizon rig exploded and sank on April 20, killing 11 workers and triggering the worst oil spill in U.S. history.

BP was not immediately available for comment.
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Engineers prepare to seal ruptured oil well

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Engineers prepare to seal ruptured oil well
Saturday, July 31, 2010

••• Engineers are preparing a plan to permanently seal a damaged Gulf of Mexico well, despite delays to the process caused by debris left behind by a recent tropical storm.

As the work continues, incoming BP boss Bob Dudley has vowed his company will not abandon residents affected by the spill after the well is finally sealed.

BP hopes to drown the well in an operation dubbed a ‘static kill’ in which mud and cement will be injected down into the ruptured wellhead via a cap installed on July 15.

Dudley said on Friday the operation had been pushed back a day, saying ‘we are hopeful by Tuesday the static kill will have been performed’.

The U.S. pointman on the crisis, Coast Guard Admiral Thad Allen, said on Friday the delay was needed to allow engineers to clear debris from the damaged wellhead caused by Tropical Storm Bonnie, which briefly halted spill operations.

But BP senior vice president Kent Wells said the company was confident the static kill would proceed successfully.

A cap in place for two weeks has shown no sign of leaks, ‘giving us more confidence that this well has integrity’, which is a positive sign for the operation, Wells said at a technical briefing on Friday.

Wells said BP hopes the static kill will be able to overcome the flow of oil, but that a second sealing method – via an intercept through a relief well – will go ahead afterwards regardless.

BP said the relief well is likely to intersect the existing well deep below the ocean floor within eight to 10 days, allowing the second sealing process – a bottom kill – by the end of August.

Making his first trip to the region since being named to replace outgoing BP CEO Tony Hayward, Dudley said on Friday the firm’s focus will shift to long-term recovery for the region now the spill is being contained.

‘We’ve had some good news on the oil… but that doesn’t mean we’re done,’ Dudley told reporters in Mississippi, one of the five states hit by the massive oil spill.

‘We’ll be here for years,’ he said, as BP announced a $100 million charitable fund to aid unemployed rig workers who are experiencing economic hardship due to the US government’s ongoing moratorium on deepwater drilling.

Dudley will take over as BP’s chief executive on October 1, when Hayward, who was widely criticised for his handling of the crisis, hands over the reins.

With the focus now moving towards mitigating the long-term impact of the worst-ever US oil spill, Dudley said there will be signs that the operation is changing.
Miles of protective boom will be withdrawn from coastlines, and fewer clean-up crews in hazmat suits will be seen on beaches as oil stops washing ashore.

‘So you’ll probably see that kind of a pullback. But commitment, absolutely no pullback,’ he pledged.

It remains unknown just how much oil has spilled into the Gulf since the BP-leased Deepwater Horizon rig exploded and sank in April, killing 11 workers. Best estimates put the amount at between three and 5.3 million barrels.

Allen said a team of experts is carrying out an ‘oil budget’ to calculate how much was released, how much was captured and how much has evaporated, adding he hopes the report will be released in the coming days.

‘It’s something we ultimately need to know,’ Allen said.

In another encouraging sign, the NOAA said southern Florida and the U.S. eastern seaboard is not likely to experience any effects from the remaining surface oil, as had been feared, as the ‘oil continues to degrade and is hundreds of miles away from the loop current’.

With the leak capped, ‘the light sheen remaining on the Gulf’s surface will continue to biodegrade and disperse but will not travel far’, said Jane Lubchenco, the National Oceanic and Atmospheric Administration chief.
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Fishermen fear for livelihoods as Gulf focus shifts

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Fishermen fear for livelihoods as Gulf focus shifts
Friday, July 30, 2010

••• U.S. officials sought on Thursday to reassure fishermen they will not lose out in the next phase of the Gulf of Mexico oil clean-up, while legal wranglings began for the BP trial of the decade.

As final preparations were put in place for operations next week to permanently kill the well, U.S. spill chief Thad Allen convened a meeting of parish presidents in New Orleans to discuss how best to safeguard local jobs going forward.

With less oil floating in the Gulf, there are fears BP might scrap its ‘Vessels of Opportunity’ program which employs more than 1500 boats, providing desperate fishermen with vital skimming and boom-laying work.

‘If BP uses the capping of the well as an excuse to minimize its clean-up operations, then shame on them,’ said Captain Mike Frenette, whose five boats in Venice, Louisiana missed an entire summer’s fishing due to the disaster.

Frenette had to apply four times before getting two of his five boats onto the program, which pays between $600 and $3500 a day, depending on the size of the boat.
‘The paperwork kept getting lost,’ he said. ‘And all that our Vessels of Opportunity work is doing is counting against our compensation claim. We’re not making any money, here, we’re just trying to keep our heads above water.’

A large portion of the Gulf waters remain closed to commercial and recreational fishing and with lingering doubts about seafood safety, fishermen could effectively end up losing their jobs for a second time.

‘The fishermen have missed a year, and we don’t know what the impact is going to be next year, or the year after that,’ said Marty O’Connell, an environmental scientist at the University of New Orleans.

Clean-up crews are collecting samples of fish and shrimp at depths of between 30 and 360 feet to test them for contaminants, but it will take years to fully know the impact of the oil disaster on Gulf fisheries.

Allen pledged earlier this week to keep as many ‘Vessels of Opportunity’ as possible, hoping they could be redeployed to test for any underwater plumes.
A massive task also lies ahead in picking up some 3 797 miles of protective boom laid to protect Gulf shores from the once-giant slick that has now diminished to just a few patches of light sheen.

Ahead of the meeting with Allen, Saint Tammany parish president Kevin Davis, said he was against reducing any oil-fighting resources for the time being.

‘Although the well is capped, we cannot let down our guard until we are absolutely certain that no oil lingers under our waters,’ he said.

Meanwhile, BP lawyers were set to come face-to-face on Thursday with victims of the spill during a first court hearing into the case, which is likely to become the trial of the decade.

The hearings in Boise, Idaho, will examine whether complaints submitted by some 200 plaintiffs can be consolidated.

A decision is expected around two weeks after the hearing, but the session will give trial lawyers a test run for the arguments they will make during what could be years-long legal proceedings.
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BP well-killing process scheduled to start in a week

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BP well-killing process scheduled to start in a week
Tuesday, July 27, 2010

••• U.S. officials laid out on Monday a detailed timeline of how BP plans to permanently plug the Gulf of Mexico oil well, saying the all-important ‘static kill’ would begin in one week’s time.

By Saturday or Sunday at the latest, a final 656 yards of casing will be inserted into the bottom of the relief well to strengthen it so it can withstand the long-awaited ‘static kill’ intact.

Some 12 hours after the cement has set, engineers will begin the crucial operation to pump mud and cement down through the cap on the damaged well, which finally cut off the flow of crude earlier this month.

‘That’s an attempt to fill the inside of the well from the top down and then cement to secure it and make it stable,’ explained Thad Allen, the retired Coast Guard admiral leading the U.S. response to the disaster.
While it is hoped this operation can effectively plug the well, the ‘static kill’ will be followed five days later by a ‘bottom kill’ operation just to make sure.

Engineers will drill through the relief well into the annulus at the bottom of the damaged well. The annulus is the area between the pipe and the outside of the well bore.

The ‘static kill’ can only plug the area inside the pipe, while the ‘bottom kill’ also aims to cement over the annulus to be certain the oil reservoir is permanently sealed.

‘So when we enter the well bore of the Macondo well we will first fill the annulus full of mud and then cement it in,’ said Allen.
‘When that cement dries then we will go back and drill through it again and into the pipe.

‘We will ascertain at that point whether or not the top kill or static kill have actually killed it or whether we have to do more. That’s when we will know absolutely that the well’s been killed.’

If all goes according to plan, the leaking well could be plugged once and for all during the second week of August.

If upper estimates above four million barrels are confirmed, the disaster that began on April 20 with an explosion on the BP-leased Deepwater Horizon rig will be the biggest accidental spill ever.
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