Posts Tagged ‘Fishing



19
Jul
10

Engineers detect seepage near BP oil well

NEWS
Engineers detect seepage near BP oil well

Monday, July 19, 2010

Earth

••• The U.S. government has raised concern over seepage near the Gulf of Mexico oil well but stopped short of asking BP to remove the cap which has halted the gushing crude for the first time since April.

BP had earlier acknowledged some bubbles appeared near the wellhead but expressed optimism that the cap could stay on, saying tests were ‘encouraging’ after three days and that a final solution was in sight.

But tensions emerged as the government’s pointman on the worst environmental disaster in US history ordered the energy giant to report swiftly on a ‘detected seep’ and ‘anomalies’ near the well head as experts monitored the seabed for cracks.

‘Given the current observations from the test, including the detected seep a distance from the well and undetermined anomalies at the well head, monitoring of the seabed is of paramount importance during the test period,’ Coast Guard Admiral Thad Allen said in a letter to BP chief managing director Bob Dudley.
Allen ordered BP to report to the government in no more than four hours when seeps are detected, and said BP must lay out its next steps in writing for ‘opening the choke valve as quickly as possible without damaging the well should hydrocarbon seepage near the well head be confirmed’.

Hydrocarbons occur naturally in crude oil, and their detection could mean that oil is seeping out from the area around the well, which began gushing oil after BP’s Deepwater Horizon oil rig exploded on April 20 and capsized two days later, killing 11 workers.

Speaking to reporters earlier in the day, BP’s chief operating officer Doug Suttles said pressure was rising slowly in the well, as expected, and touted ‘encouraging signs’ that would allow the newly placed cap to remain on the well until a permanent ‘kill’ operation takes place in August.

‘In two different locations we’ve seen a few bubbles. This is not uncommon but clearly it’s important that we check everything very closely so we’re monitoring that,’ Suttles said.
The U.S. government was granting extensions to exhaustive well tests on a 24-hour basis, while BP said the valves on the containment cap that is staunching the flow would remain shut as long as no leaks are discovered.

‘Clearly we don’t want to reinitiate flow into the Gulf if we don’t have to,’ said Suttles.

Three days of respite from the unsettling images of oil gushing into the Gulf of Mexico raised hopes among residents that this could mark the beginning of the end of what estimates suggest is the biggest oil spill ever.

The start of the two-week operation to plug the well permanently by pumping in heavy drilling fluids and then cement is now less than two weeks away as engineers have only 98 feet left vertically to drill.

Gulf residents, who have seen the relentless flow of crude tarnish their shorelines and cripple the local economy, reacted cautiously to news that the cap was holding back the crude, wary of being given false hope after weeks of botched BP operations.

‘I don’t know if it’s going help. It’s still a short-term fix,’ New Orleans resident and medical researcher Ashok Pullikuth told AFP. ‘The permanent fix is the relief wells. This cap has saved a month’s worth of spill damage.’
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13
Jul
10

BP confirms placing new cap over oil leak in Gulf of Mexico

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BP confirms placing new cap over oil leak in Gulf of Mexico

Tuesday, July 13, 2010

Earth

••• BP has confirmed it has successfully placed a new cap over the Gulf of Mexico oil leak, hoping the giant valve will seal the well or contain all the gushing crude.

BP officials said on Monday evening the cap was mounted on the well after two days of preparing the site and a day of slowly lowering it into place.
The company plans to run tests, starting on Tuesday, to see if the cap can withstand pressure.

‘It is expected, although cannot be assured, that no oil will be released to the ocean for the duration of the test,’ the oil giant said in a statement, adding however that it would not indicate if the flow had permanently stopped.
The old cap, removed on Saturday, did not have a tight fit and allowed crude to escape.

The new cap will enable BP to capture all the oil and funnel it up to ships.

BP is drilling two relief wells so it can pump mud and cement into the leaking well for a permanent fix.
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12
Jul
10

Oil spill hopes raise with BP’s latest effort to fix it

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Oil spill hopes raise with BP’s latest effort to fix it

Monday, July 12, 2010

Earth••• BP reported good progress on its high-stakes effort to fully contain the Gulf of Mexico oil leak by fixing a tighter cap over the giant gusher.

Operations have reached a critical phase as engineers race to take advantage of a stretch of fine weather in the midst of the Atlantic hurricane season to install a new system with the potential to capture all the leaking crude.

Expected to take between four and seven days, the round-the-clock work began at midday on Saturday when the old, less efficient cap was ripped off a fractured pipe 1.6km down on the sea floor by robotic submarines.

‘We are pleased with our progress,’ BP Vice President Kent Wells told journalists almost 24 hours in. ‘We have carefully planned and practised this whole procedure. We’ve tried to work out as many of the bugs as we can.’

Sunday’s operations saw a transition spool being lowered into place which must be bolted onto the leaking pipe before a gigantic funnel – weighing 68 tonnes and dubbed the ‘Top Hat 10’ – can be installed.

The old ‘Top Hat’ system collected roughly 25,000 barrels of crude every day, but estimates suggest that could be less than half the leak.

BP says the new cap and the deployment of a third containment ship called the Helix Producer will raise the system’s capacity to between 60,000 and 80,000 barrels a day, enough to capture all the leaking oil.

The new system has also been designed so it can be disconnected and reconnected more easily in the case of a hurricane and has a built-in device that should give the first precise estimate of the overall flow.
No permanent solution is expected until mid-August at the earliest when the first of two relief wells is due to be completed – allowing drilling fluids to be injected into the well, which would then be sealed with cement.

The decision to remove the old cap and allow most of the oil to pour unchecked into the sea was approved by Admiral Thad Allen, the former Coast Guard chief leading the US government’s response to the disaster.

Although the removal of the cap forced the suspension of the main containment operation, a separate siphoning system is taking a smaller proportion of the oil to be flared off on a surface vessel.

Wells said two more ships would join a fleet of 46 skimming vessels scooping up oil off the sea and said 15 controlled burns of the surface crude had been carried out on Saturday.

Oil has washed up on beaches in all five Gulf states – Texas, Louisiana, Mississippi, Alabama and Florida – forcing fishing grounds to be closed and threatening scores of coastal communities with financial ruin.

The man charged with doling out compensation to victims of the spill said he could not estimate whether the initial $20 billion fund set up by BP would be enough to pay compensation claims.

‘If they are eligible, we will give them up to six months emergency (compensation),’ Kenneth Feinberg told CNN, adding: ‘I can’t help people if they don’t file.’

Many fishermen and others who work in the Gulf get paid in cash and do not have paperwork to back up their claims. Some are also worried that if they ask for compensation, the government will seek taxes for previous income.
While the containment effort and the claims process continued apace, the attorney general said the Justice Department was also still considering whether to bring criminal charges against the culprit or culprits.

‘The investigation is ongoing. We are in the process of accumulating documents, talking to witnesses on both the criminal side and the civil side,’ Eric Holder told CBS’s Face the Nation program.

Holder was quick to stress that when he announced the probe on June 1, he had been careful not to mention BP by name as it was not the only party involved with the Deepwater Horizon rig.

At congressional hearings back in May, BP, rig owner Transocean and oil services provider Halliburton blamed each other for the spill as executives from all three oil titans were grilled by U.S. lawmakers.

The man charged with doling out BP’s compensation to victims of the Gulf oil spill said on Sunday he is prepared to pay up to six months of expenses in advance, but getting people to file claims is a struggle.

Kenneth Feinberg told CNN he wanted to provide ‘some degree of financial certainty’, to people who have found their livelihoods hurt by the massive oil spill. ‘If they are eligible, we will give them up to six months emergency (compensation).’

But, he lamented, ‘I can’t help people if they don’t file.’

Many of the fishermen and others who work in the Gulf region regularly get paid in cash and do not have paperwork to back up their claims of lost income. They are also worried that if they ask for compensation, the government will seek taxes for previous income.

The BP-leased rig exploded on April 20 killing 11 workers. It sank two days later, unleashing the nation’s worst ever environmental disaster.
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07
Jul
10

Oil comes ashore in Texas as BP dismisses money fears

NEWS
Oil comes ashore in Texas as BP dismisses money fears

Wednesday, July 7, 2010

Earth••• Clean-up efforts in the Gulf of Mexico oil spill extended Tuesday to Texas and Lake Pontchartrain, Louisiana, as BP dismissed reports of deeper financial woes.

Officials said crews collected tar balls and waste from Lake Pontchartrain, the vast estuary near New Orleans, as rough weather continued to hamper the containment and skimming effort near the spill site in the Gulf.

U.S. Coast Guard Admiral Thad Allen said the huge spill was now threatening all the states along the Gulf coast from Florida to Texas and that rough seas since the passage of Hurricane Alex had hurt the effort.

The first Atlantic hurricane of the year passed through the Gulf of Mexico last week without too much alarm for the oil containment efforts, but Allen said two nearby storm systems were being closely watched.

‘We’re watching very, very closely the swells and waves that might be generated by this current storm system,’ he said.

‘Sometime in the seven to 10 days we’ll look for a window of opportunity to put the containment cap on at the same time we will go on and continue with the drilling of the relief well.’
A BP spokeswoman in London denied the firm was planning to sell new stock to a strategic investor to raise money, amid reports the British government is working on a crisis plan if the company is sunk by the disaster.

‘We are not issuing any new equity,’ she said. ‘We welcome new shareholders to come onto the shareholder register and we welcome existing shareholders who want to take a bigger amount of shares.’

The Times newspaper in London reported that officials at the Department of Business and the Treasury were already considering contingencies for BP’s potential collapse.

‘It is not clear how bad this will get, but the government needs to be prepared for any eventuality,’ an anonymous source said to be familiar with the talks was quoted as saying.

BP has forked out some $3.12 billion in spill-related costs and has promised to pay another $20 billion into an escrow fund to compensate Americans affected by the spill.

The BP-leased Deepwater Horizon rig sank on April 22, two days after an explosion that killed 11 workers, unleashing the worst environmental disaster in U.S. history.
On Sunday, tar balls from the spill arrived on beaches in Texas, more than 310 miles away, though it was unclear how the crude got there.

Tests showed they did come from the BP Deepwater Horizon well but scientists and officials were working to determine if they arrived in Texas by currents or via ships operating in the vicinity of the well head.

The tar balls in Lake Pontchartrain were also being tested.

Some 492 miles of Gulf Coast shoreline has been oiled, and fishing ground closures and tourist cancellations threaten financial ruin for residents who have reacted angrily to BP’s failure to cap the spill.

Up to 60,000 barrels of oil a day is believed to be leaking into the Gulf of Mexico, far outpacing the collection efforts of a system that is capturing around 25,000 barrels a day.

Officials hope to more than double that capacity to some 53,000 barrels a day by hooking up a third containment vessel, the Helix Producer, to the system that captures and siphons away the crude.

‘There is a partial hookup right now and they can sustain that unless they have really severe sea states,’ said Allen, the U.S. official coordinating the spill response.

‘We won’t know for several hours whether they’re able to do it. It currently is a work in progress.’
Officials were also testing a mega-tanker, A Whale, which could boost efforts to skim spilled crude from the sea surface.

The ship is believed to be able to suck up to 500,000 barrels of oily water a day through its ‘jaws’, a series of vents on the side of the ship.

By comparison, more than 500 smaller vessels in 10 weeks have only managed to collect some 31.3 million gallons of oil-water mix between them and high waves forced most of the boats to halt operations on Tuesday.

It will likely be mid-August at the earliest before the ruptured well is permanently capped by injecting mud and cement with the aid of relief wells.

The high end of the oil leak estimates means it has now surpassed the 1979 Ixtoc blowout, which took nine months to cap and dumped an estimated 3.3 million barrels into the Gulf of Mexico.

It is topped only by the deliberate release of six to eight million barrels of crude by Iraqi troops who destroyed tankers and oil terminals and set wells ablaze in Kuwait during the 1991 Gulf War.
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04
Jul
10

Rough seas halt U.S. spill clean-up as crews test mega-skimmer

NEWS
Rough seas halt U.S. spill clean-up as crews test mega-skimmer

Sunday, July 4, 2010

Earth••• Clean-up work resumed in some areas of the Gulf of Mexico oil spill, but heavy swells kept many boats docked, halting efforts to fight the ecological disaster.

A Taiwanese mega-skimmer dubbed the ‘A Whale’ was in position near the site of the leak and set to undergo 48 hours of ‘proof of concept’ testing, Coast Guard spokeswoman Ayla Kelley said.
The 903 feet long tanker can vacuum up 21 million gallons of oily water a day, separating oil from water and spitting the seawater back out.

Small skimming boats that have been patrolling the Gulf for the past 10 weeks have only collected 28.2 million gallons of oily water to date, and rough weather made seas off Louisiana too choppy for them to even go out on Saturday.

Coast Guard Petty Officer Kelly Parker at a Houma, Louisiana information centre said crews were resetting protective booms along fragile coastal areas, but skimming and controlled burns of spilled crude had been halted.

However, around the Chandeleur Islands, a chain of uninhabited barrier islands and wildlife refuge at Louisiana’s easternmost point, boom and skimming operations resumed on Friday, said a representative of Admiral Thad Allen, the top official overseeing the spill response.

‘These are the most environmentally sensitive areas. The good news is that we saw only light oil and there were hundreds of boats working in the area resetting boom and skimming,’ rear admiral Paul Zunkunft told reporters after he flew over the islands.

‘The areas are critical to defend because they are home to turtles, shrimp and other wildlife,’ Zukunft said.
Despite containment efforts, he warned: ‘We are not out of the woods yet.’

An estimated 35,000 to 60,000 barrels of oil per day has gushed from the ruptured well since the BP-leased Deepwater Horizon drilling rig sank on April 22, some 50 miles off the coast of Louisiana.

A containment system has captured about 557,000 barrels of oil, but rough seas delayed the deployment of a third vessel that could boost capacity from 25,000 barrels to 53,000 barrels a day.

That means an estimated 1.9 to 3.6 million barrels – or 79.5 to 153 million gallons – of oil has now gushed into the Gulf.

Using the high end of that estimate, the spill has now surpassed the 1979 Ixtoc blowout, which took nine months to cap and dumped an estimated 3.3 million barrels (140,000 million gallons) into the Gulf of Mexico.

It is topped only by the deliberate release of six to eight million barrels of crude by Iraqi troops who destroyed tankers and oil terminals and set wells ablaze in Kuwait during the 1991 Gulf War.
And it will likely be mid-August at the earliest before the Gulf well is permanently capped by injecting mud and cement with the aid of relief wells.
Skimmers had been collecting about 12,000 barrels of oil a day before they were sent back to port after Hurricane Alex whipped up waves earlier this week, while about 8,000 barrels of oil was being burned off the surface.
But the spill has so far oiled at least 450 miles of U.S. shorelines, 74 days into the worst environmental disaster in U.S. history.

Admiral Allen said he hoped to have the third containment vessel, the Helix Producer, in place by Wednesday.

Once the Producer is working, officials will also have a better sense of just how much crude is leaking, ‘just by the visual evidence of how much oil is actually coming out around that cap’, Allen said.

They will then have to decide if the existing system should stay in place, or if it would be best to undergo a risky procedure to replace the cap with another system capable of capturing up to 80,000 barrels of oil a day.

‘The decision window associated with that would be sometime in the next, I would say, seven to 10 days,’ Allen said in a conference call on Friday.

In addition to boosting capacity, the new system would also greatly reduce the amount of time oil could gush freely into the sea if crews had to evacuate due to a bad storm.

Meanwhile, Environmental Protection Agency chief Lisa Jackson was headed to Pensacola, Florida to oversee coastal clean-up operations in the state, where tourist draws Miami and the Florida Keys face the likelihood of fouled beaches.
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30
Jun
10

Obama slams Republicans over BP ‘apology’ and economy

NEWS
Obama slams Republicans over BP ‘apology’ and economy

Wednesday, June 30, 2010

••• U.S. President Barack Obama lampooned Republicans over the Gulf of Mexico oil spill on Wednesday, seeking to turn a disaster that has been a political liability for him into a political weapon.

Obama cited a gaffe by a leading Republican politician who said the US government’s hardline tactics were a ‘tragedy’ for BP, to lambast the opposition party as the pace heats up ahead of November’s mid-term elections.

He said some Republicans opposed raising the legal cap on liabilities BP must pay to clean-up America’s worst environmental disaster and a $20 billion BP escrow compensation fund for businesses victimised by it.

‘The top Republican on the energy committee even had the nerve to apologise to BP for the fact that we made them set up this fund,’ Obama said in remarks released by the White House prior to a presidential event in Wisconsin.

‘Apologise to BP! He actually called the fund a tragedy. A tragedy? A tragedy is what the people of the Gulf are going through right now.

‘That’s the tragedy. And our government has a responsibility to hold the corporations accountable that caused it. They want to take us backwards. We want to move forward.’

Democrats are mercilessly using comments by Republican Representative Joe Barton, who offered them a golden opening by apologising to BP for the escrow fund, which he called a $20 billion White House ‘shakedown’ of BP.

Barton has retracted the remarks, and his party leaders have condemned them, but the comments are bound to be seized upon often by Democrats in the run-up to November’s congressional polls, in which the party fears heavy losses.
Obama’s switch to full bore politicking mode over the oil spill reflects the way both political parties will try to use the disaster for political advantage. Republicans have accused Obama of being too passive in the crisis.

Recent polling give the president poor to moderate ratings on how he has handled the oil spill, though his management of the crisis is much preferred by Americans to the performance over BP during the disaster.

Forty-four per cent of those asked in a Gallup poll this month approved of Obama’s efforts, while 48 per cent disapproved.

BP and other oil firms are currently bound under U.S. law to pay all related clean-up costs from a spill, but the limit on liability for compensation and other claims is set at $75 million.

Democratic efforts to raise the cap took another step forward on Wednesday as the Senate Environment and Public Works committee approved a bill retroactively removing the cap for BP.

The bill now heads to the full chamber for debate.

‘As we see the images and read the stories from the Gulf Coast night after night, it could not be clearer that coastal families and taxpayers are the ones who need protection, not oil companies,’ the bill’s sponsor Robert Menendez said.
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24
Jun
10

After Earlier Troubles, BP Says It Restored Cap

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After Earlier Troubles, BP Says It Restored Cap
Thursday, June 24, 2010

Earth••• BP on Wednesday reinstalled an oil containment system sucking up crude from a ruptured pipe in the Gulf of Mexico, which had been removed following a collision with a robotic submarine.

The oil cap ‘was successfully reinstalled on the Deepwater Horizon’s failed blow-out preventer’ at 6.30 pm Wednesday, BP said in a statement, adding that ‘the system resumed collecting oil and gas’ a half hour later.

Oil spewed unhindered into the Gulf of Mexico when BP detached the “top hat” cap, which traps leaking oil and then siphons it up to a container ship, and made repairs after a remote-controlled submarine crashed into it.

The setback marked a terrible start for American Bob Dudley in his first day as BP’s disaster coordinator, brought in by the firm to replace gaffe-prone British CEO Tony Hayward.

Admiral Thad Allen, leading the U.S. government effort to confront the nation’s worst ever environmental disaster, said earlier the cap had been removed for inspection after crews detected gas.

“Out of an abundance of caution … they moved the containment cap with the riser pipe and moved away so they can assess the condition,” Allen told reporters earlier on Wednesday, before the cap was reattached.

“They indicated the problem was a remotely-operated vehicle had bumped into one of the vents,” Allen said, adding that the vent had then closed, creating pressure that had forced up gas and other materials.

The cap is siphoning away some 25,000 barrels of oil each day, and keeping it off would have exacerbated the dire effects of the massive leak that has allowed between 35,000 and 60,000 barrels of crude to gush into the sea, according to the latest U.S. government estimates.

Completing a disastrous start for Dudley, Allen said two people involved in the clean-up efforts had been reported dead in separate incidents.
One was killed in what he described as “an accident regarding a swimming pool,” and the second individual died of a likely self-inflicted gunshot to the head, according to the local Alabama coroner who treated the body.

Dudley assumes command from Hayward, who faced massive criticism of his handling of the spill, including accusations of insensitivity, and was ridiculed as out of touch.

Unlike Hayward, Dudley is an American citizen who spent much of his childhood in Mississippi, one of the four southern U.S. states whose coastlines face an environmental catastrophe.

The news came as administration officials pledged to redouble efforts to freeze new deepwater oil drilling while they assessed safety regulations.

On Tuesday, Judge Martin Feldman overturned a drilling moratorium authorised by President Barack Obama in the spill’s aftermath, saying it was ‘arbitrary and capricious’.

But the White House pledged to appeal the decision and Interior Secretary Ken Salazar told lawmakers at a hearing on Wednesday that he would soon issue a new order to ensure the freeze sticks.

“We will move forward with the executive authority which I have to make sure that the moratorium stays in place,” Salazar said.

The Obama administration believes the decision flies in the face of mounting evidence that there are serious safety risks with the 33 deepwater wells in question.

But oil workers and executives argue the freeze is driving away business, and Louisiana Governor Bobby Jindal, a Republican, said the moratorium hurt the same people already being negatively impacted by the spill.

An internal BP document released by a U.S. lawmaker this week showed the firm contemplated a worst-case scenario of up to 100,000 barrels, or 4.2 million gallons, a day leaking.

America’s worst previous oil spill, the 1989 Exxon Valdez disaster, dumped nearly 11 million gallons off the Alaskan coast, but even under the low end of current estimates, more than 90 million gallons have entered the Gulf.

BP has spent $2 billion so far on cleaning up the spill and compensating residents and businesses facing ruin.
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24
Jun
10

Gulf oil spill has new face: BP replaces Tony Hayward with Bob Dudley as head of cleanup effort

NEWS
Gulf oil spill has new face: BP replaces Tony Hayward with Bob Dudley as head of cleanup effort
Thursday, June 24, 2010

••• BP put Mississippi native Bob Dudley in charge of handling the Gulf oil spill in an effort to take the spotlight off chief executive Tony Hayward.

BP PLC confirmed that Dudley, who grew up in Hattiesburg, an easy drive from the coast, is now the point man in the mission to stop the oil gusher and deal with the economic damage it has caused.

Dudley, who had led BP’s operations in the Americas and Asia, is no stranger to tough situations, having protected his company’s interests in rough dealing in Russia even after he was barred from the country.

The 54-year-old spent two decades climbing the ranks at Amoco Corp., which merged with BP, and lost out to Hayward on the CEO’s slot three years ago.

Perhaps most importantly, he is a fresh face for the oil company as it attempts to fix the spill and protect its future. Hayward shocked Gulf residents last month when he said “I’d like my life back” and weeks later went yachting.

Dudley was appointed president and chief executive of the newly created Gulf Coast Restoration Organization, effective immediately, and will report to Hayward.

“In the near term, my focus will be on listening to stakeholders, so we can address concerns and remove obstacles that get in the way of our effectiveness. And we’ll build an organisation that over the longer term fulfils BP’s commitments to the restore the livelihoods and the environment of the Gulf Coast,” Dudley said.

The reorganisation followed a series of humiliations in recent days for BP. Last week it bowed to President Barack Obama’s demand that it set up a $20 billion escrow fund to cover damages and to suspend dividend payments, followed a day later by a public thrashing for Hayward before a Congressional committee.

Hayward repeatedly apologised and expressed sorrow for the oil leak caused by a fire and explosion on the Deepwater Horizon drilling rig on April 20. Eleven workers on the rig died.

Members of the House Energy and Commerce Committee were infuriated when Hayward denied direct responsibility for operational decisions which may have led to the disaster.

“You’re really insulting our intelligence,” Rep. Eliot Engel, a Democrat from New York, said at Thursday’s hearing. “I am thoroughly disgusted.”
Hayward had a further public relations gaffe over the weekend when he was photographed at a yacht race, and on Tuesday he ducked out of a previously announced commitment to speak at an oil industry conference in London.

A defining moment in BP’s response to the disaster came on May 30 with Hayward’s unguarded remark that “There’s no one who wants this over more than I do. I’d like my life back.”

Prime Minister David Cameron intends to press Obama this weekend at the G8 summit for more clarity on the ultimate financial cost that BP will face, the British leader’s office said.

Cameron told the House of Commons on Wednesday that the company is prepared to meet its obligations to fund the clean up and compensate those whose businesses have been blighted by the spill.

“But we do want to make sure that this remains a strong and stable company, for our benefit but also for the benefit of the United States,” Cameron said.

BP said the newly formed organisation will manage all aspects of the response to the Deepwater Horizon incident and the oil and gas spill in the Gulf of Mexico. That includes clean-up operations, coordinating with the U.S. government and local officials, and managing the $20 billion escrow account.

“Having grown up in Mississippi, Bob has a deep appreciation and affinity for the Gulf Coast, and believes deeply in BP’s commitment to restore the region,” Hayward said.

“Our commitment to the Gulf States is for the long-term. And that requires a more permanent sustainable organisation to see it through,” Hayward added.

BP had said on Tuesday that Dudley would be taking the lead in the United States while Hayward retreated to his chief executive role.

Dudley’s oil industry career began in 1979 with Amoco, which merged with BP in 1998.

Between 1994 and 1997 Dudley was based in Moscow, working on developing Amoco’s business in Russia. From 2003 to 2008, he was president and chief executive of TNK-BP, a joint venture in Russia with a consortium of billionaires.

In that job, he steered the firm through a series of politically explosive disputes that saw one employee charged with espionage, the company’s offices raided by Russian intelligence, an investor boycott and a barrage of tax and labour investigations.
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22
Jun
10

U.S. slaps BP with new bill

NEWS
U.S. slaps BP with new bill
Tuesday, June 22, 2010

••• The White House has slapped BP with a new $51 million bill, the third sent to the British energy giant.

Officials have stressed that they would keep billing the British energy giant for all associated costs from America’s biggest-ever environmental disaster, under a U.S. law requiring oil firms to pay for cleanups.

“As a responsible party, BP is financially responsible for all costs associated with the response to the spill,” the administration said.

That includes “efforts to stop the leak at its source, reduce the spread of oil, protect the shoreline and mitigate damages, as well as long term recovery efforts to ensure that all individuals and communities impacted by the spill are made whole.”

Two earlier bills to BP and other responsible parties this month amounting to $70.89 million were paid in full, it said in a statement.
The invoice charges the firms for ‘specific federal government expenses’ including response costs for more than 24 federal entities and agencies from three U.S. states, as well as for reimbursing the trust fund set up by BP and the government to reimburse local individuals and businesses affected by the massive spill.

The Oil Pollution Act of 1990, enacted after the Exxon Valdez oil disaster in Alaska, made oil giants liable for cleanup costs resulting from spills and is being used by the administration to hold BP’s feet to the fire.

Obama has also vowed to hold BP responsible if it is found that the company broke any laws before the explosion of the Deepwater Horizon rig in April.

BP said on Monday it has so far spent $2 billion on the spill, including ongoing efforts at containment, relief well drilling, grants to Gulf states, claims paid to thousands of affected individuals and businesses, and costs incurred by the U.S. government.
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21
Jun
10

Gulf Paymaster Pledges to Speed Up Compensation Claims, Says Residents ‘Desperate’

NEWS
Gulf Paymaster Pledges to Speed Up Compensation Claims, Says Residents ‘Desperate’

Monday, June 21, 2010

••• The administrator of a $20 billion compensation fund set up by British oil giant BP said on Monday he will speed up payment of compensation to those affected by the devastating oil spill in the Gulf of Mexico.

Kenneth Feinberg, who was tapped by President Barack Obama to run the third party fund, said on U.S. television that Obama has conveyed to him a message that “we want to get these claims out quicker. We want to get these claims out with more transparency.”

He said when it comes to emergency payments, “you’ve got to allow those payments to go out with less corroboration than you would if you’re giving a lump-sum payment that is the total compensation.”

“For the emergency payments, we’ve got to err on the side of the claimant,” he said.
The White House and BP has worked out an agreement last week that BP would fund the $20 billion fund, managed independently by White House tapped Feinberg. Feinberg on Monday appeared on several TV networks’ news programs, explaining how he intends to run the compensation fund.

Feinberg said people can file electronically for relief, and can do so without the help of a lawyer. “When a person comes in and asks for emergency assistance, they shouldn’t have to keep coming back,” said he.

The oil spill, which is now two months old, has hurt fishing, tourism, oil and other businesses. The fund is set up to compensate lost wages, business interruption, lost profits, personal injuries and even deaths.

BP said on Monday it has spent $2 billion so far on cleaning up the spill.
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21
Jun
10

Oil firms challenge drilling ban

NEWS
Oil firms challenge drilling ban

Monday, June 21, 2010

••• Oil firms have gone to court seeking to lift a six-month freeze on deepwater drilling, as BP documents reveal 100,000 barrels of crude may be spewing into the Gulf of Mexico.

The British energy giant also says it has spent $2 billion on cleaning up the spill and compensating residents and businesses facing ruin nine weeks into the nation’s worst ever environmental disaster.

U.S. firms, whose crews and equipment have been idled since U.S. President Barack Obama imposed a moratorium on deep water drilling and exploration in the Gulf, have urged a judge to ease the restrictions.

The government stand “is effectively a moratorium on all drilling because it may take months if not years for the industry to come into compliance with the standards, some of which have not yet been determined,” the plaintiffs argued on Monday.

Delaware-based Hornbeck Offshore Services, which first lodged the case, said in court documents the moratorium was “arbitrary, capricious, an abuse of discretion” and inconsistent with industry regulations.

In a deal hammered out with the White House last week, BP agreed to set up a $20 billion compensation fund over the next four years to pay for the damage wrought by the spill.

It also set aside $100 million to compensate oil workers laid off as a result of the spill, triggered by an April 20 explosion on a BP-leased rig off Louisiana.

Kenneth Feinberg, named to run the fund, said Obama told him: ‘Get these claims paid. Get them paid quickly.’
“We want to get these claims out quicker and we want to get these claims out with more transparency so people have more certainty as to what they are going to receive,” Feinberg told the ABC network on Sunday.

“We want to do it in the next couple of weeks so that people who are down in the Gulf, who are in desperate financial straits as a result of this spill, are receiving financial compensation.”

But The Wall Street Journal reported BP’s additional sum for unemployed workers was a goodwill drop in the ocean compared with the estimated $300 million being lost every month as rigs are mothballed.

BP had successfully argued in the negotiations that the moratorium was a U.S. administration policy decision, for which they were not responsible.

“You won’t find many lawyers who will say when the government imposes a moratorium it’s the company’s obligation to help the workers impacted,” a BP negotiator told the business daily.

BP had also managed to fend off White House demands to pay to restore and improve the Gulf marshes and waterways – already blighted since the 2005 Hurricane Katrina – to leave them in a better condition than before the spill.

In a statement to the London Stock Exchange, the embattled British energy giant – which has seen its credit ratings downgraded and share prices plunge – said it had spent $2 billion on the spill.

The costs included paying for containment, relief well drilling, grants to Gulf states, claims paid to those affected and costs incurred by the U.S. government.
Meanwhile, a worker on the Deepwater Horizon rig revealed he had alerted BP and Transocean, the rig’s owners, to a leak found in the control pod of the blowout preventer – a system of valves which failed to shut down the oil flow when the explosion happened.

“We saw a leak on the pod, so by seeing the leak we informed the company men,” Tyrone Benton told the BBC.

“They have a control room where they could turn off that pod and turn on the other one, so that they don’t have to stop production… they just shut it down and worked off another pod.”

The news came as internal BP documents suggested in the worst case scenario about 100,000 barrels per day of crude could be spilling into the Gulf – way higher than U.S. official estimates of 35,000 to 60,000 bpd.

BP says it is containing about 25,000 barrels a day, and has called in more ships and equipment to boost the effort.

But a key U.S. congressman, Ed Markey, tore into the firm after releasing the document. “‘First they said it was only 1000 barrels, then they said it was 5000 barrels; now we’re up to 100,000 barrels,” Markey told NBC television.

BP rejected Markey’s charge. The estimate “has nothing (to do) with the amount of oil that’s actually escaping at the moment,” spokesman Robert Wine said.

BP has said the spill will not be permanently capped until they have completed two relief wells, with the first set to be finished in August.
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20
Jun
10

BP chief escapes oil spill for Cowes yacht race

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BP chief escapes oil spill for Cowes yacht race

Sunday, June 20, 2010

In what one environmentalist has described as ‘yet another public relations disaster’ for embattled energy giant BP, CEO Tony Hayward has taken time off to attend a glitzy yacht race around England’s Isle of Wight.
As social networking sites like Twitter and Facebook lit up with outrage, BP spokespeople rushed to defend Hayward, who has drawn withering criticism as the public face of BP’s halting efforts to stop the worst oil spill in U.S. history.
Spokeswoman Sheila Williams said Hayward took a break from overseeing BP efforts to stem the undersea gusher in Gulf of Mexico so he could watch his boat ‘Bob’ participate in the J P Morgan Asset Management Round the Island Race on Saturday. The 16-metre yacht was made by the Annapolis, Maryland-based boat builder Farr Yacht Design.

The annual one-day race is one of the world’s largest, attracting more than 1700 boats and 16,000 sailors as world-renowned yachtsmen compete with wealthy amateurs in the 50-nautical mile course around the island.
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• Source(s): British Petroleum PLC and Sky News / BSkyB / News Corporation
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18
Jun
10

BP CEO Tony Hayward to hand over daily Gulf oil spill operations

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BP CEO Tony Hayward to hand over daily Gulf oil spill operations

Friday, June 18, 2010

BP chief executive Tony Hayward is in the process of handing over day-to-day management of the Gulf oil leak operation to another top manager, Bob Dudley, BP chairman Carl-Henric Svanberg says.

BP announced the appointment of Dudley earlier this month as head of BP’s new disaster management unit, but did not specify a timetable for transferring responsibilies.

In an interview with British broadcaster Sky News, Svanberg said the transfer to Dudley, a U.S. national and managing director of the energy giant, is already occurring.

‘Our focus in the management team has been to close that well, to clean up the beaches and make sure that we compensate those that have suffered, and that has been everything on our agenda,’ he said on Friday.

‘Right after the explosion (Hayward) went out there and he has been leading the response ever since,’ he said. ‘I think everyone believed it to be something we could deal with faster, then he would come back…

‘And now he’s been around for eight weeks, he’s now handing over the daily operations to Bob Dudley, and he will be more home, and be there and be here,’ he told the broadcaster.
The announcement came a day after Hayward, so far BP’s main public face for its clean-up operation, faced a barrage of hostile questions from U.S. lawmakers about the spill that ripped through the BP-leased Deepwater Horizon oil rig.

Hayward, a Briton, has faced growing U.S. anger about a series of blunders in the wake of the April 20 explosion, which killed 11 workers and triggered the worst man-made environmental disaster in U.S. history.

BP has some 23,000 employees in the United States. It also claims about 75,000 retirees from the firm and its subsidiaries and holds more than 500,000 retail shareholders in the country.
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• Source(s): British Petroleum PLC and Sky News / BSkyB / News Corporation
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17
Jun
10

Lawmakers accuse BP chief of evasion over oil spill

NEWS
Lawmakers accuse BP chief of evasion over oil spill

Thursday, June 17, 2010

BP boss Tony Hayward has vowed the British energy giant will repair the economic and environmental devastation caused by the Gulf of Mexico oil spill as he was quizzed by irate lawmakers.

‘I know that only actions and results, not mere words ultimately can give you the confidence you seek. I give my pledge as the leader of BP that we will not rest until we make this right,’ a contrite Hayward said on Thursday.

Saying it was too early to pin down the causes of the April explosion on a BP-leased rig off Louisiana, Hayward pledged: ‘We and the entire industry will learn from this terrible event and emerge stronger, smarter and safer.’

Some lawmakers have publicly suggested senior BP officials should ‘commit hara-kiri’ over what has become the nation’s worst ever environmental disaster.

Amid tight security and sitting alone at a table to face congressmen and a media barrage, Hayward was sharply criticised in his first public appearance before Congress since the catastrophe was unleashed on southern U.S. shores.

‘I’m sure you will get your life back, and with a golden parachute back in England. But we in America are left with the terrible consequences of BP’s reckless disregard for safety,’ said Democratic Representative Bart Stupak.
Stupak, who chaired the hearing, was referring to a much-denounced statement in which Hayward, who has been the public face of the disaster, had said he wanted it to end so he could get on with his life.

At one point, a protester disrupted the hearing. ‘You need to be charged with a crime, Tony,’ she shouted. ‘You need to go to jail!’

She grappled with police and kept shouting as she wrestled with police trying to restrain her.

Tensions have been running high with millions of barrels of crude fouling the shorelines of four U.S. states, closing down fishing waters and hitting the region’s vital tourist industry.

On Wednesday BP agreed to set up a $20 billion escrow fund to pay compensation claims from thousands of Gulf businesses and residents facing economic ruin.

The deal was struck after Hayward and BP chairman Carl-Henric Svanberg were summoned to the White House for talks with U.S. President Barack Obama.

News of the escrow fund deal with the U.S. administration sent BP’s share price soaring almost 10 per cent on Thursday, after days of falls sparked by uncertainty over its future.

The fund will be run by prominent lawyer Kenneth Feinberg, who managed compensation claims by victims of the September 11, 2001 terror attacks, and will be overseen by a panel of three judges who can hear appeals.

BP will fund the account in four annual payments of $5 billion, the White House said in a statement, adding it was ‘neither a floor nor a ceiling’ on BP’s total liability for the disaster.

The firm’s final bill will be tied to the amount of oil still spewing into the ocean each day, with U.S. experts putting that figure at between 35,000 and 60,000 barrels.

Hayward told lawmakers BP is now siphoning up an average of 20,000 barrels a day of oil to two processing ships on the surface.

The U.S. disaster coordinator, Admiral Thad Allen, said by ‘sometime early next week’ the company hoped to be containing 28,000 gallons – some of which will be burnt off by one of the surface ships.
And in some good news, Allen said drilling on a relief well, seen as the only way of permanently capping the spill, was ahead of schedule.

‘Mid-August was the target date; they’re actually ahead of schedule right now, but I’m not going to guarantee it will be earlier,’ Allen said, citing the meticulous work needed in carrying out the work safely.

‘We should be very wary about hard deadlines,’ he cautioned.

Analysts said BP, which has spent about $1.6 billion battling the spill and made a profit of about $14 billion in 2009, should be strong enough to weather the storm even if it has to borrow more.

‘They have enough cash flow and quality assets that will allow it to fund that type of liability,’ said Jason Gammel of Macquarie Research.

Amid deepening anger over the spill, Louisiana Representative Joseph Cao told one of Hayward’s colleagues this week that even the resignations of BP officials would not be enough.

‘In the Asian culture we do things differently. During the samurai days, we just give you a knife and ask to you commit hara-kiri,’ he said.
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• Source(s): British Petroleum PLC and Sky News / BSkyB / News Corporation
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17
Jun
10

BP CEO Tony Hayward “Devastated” by Oil Spill

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BP CEO Tony Hayward “Devastated” by Oil Spill

Thursday, June 17, 2010

BP’s chief executive says he has been ‘personally devastated’ by the explosion of the Deepwater Horizon oil rig and understands the anger Americans feel toward him and his company.

In testimony to be delivered to a Congressional Committee later today, Tony Hayward says BP does not yet have answers to important questions about the spill, which has dumped millions of gallons of oil into the Gulf of Mexico.

But Mr Hayward says he knows there will be hard feelings until the leak is stopped, and until it is, ‘no words will be satisfying’.

Mr Hayward is expected to face tough questioning from the Congressional panel who believe BP cut corners to save money.

On Wednesday he joined company chairman Carl-Henric Svanberg at the White House for a meeting with President Obama during which BP agreed to place $20 billion into an independently-managed compensation fund.

BP has also announced it will suspend its dividend payment to shareholders.

Mr Svanberg said: ‘I hear comments sometimes that large oil companies are greedy companies or don’t care, but that is not the case with BP. We care about the small people.’

Although a BP public relations spokesman described it as a ‘slip in translation’, the remark drew icy comments in the U.S. for its perceived condescending tone.
For the community of Orange Beach, Alabama, where oil has washed ashore from the massive leak, news of a claim fund is welcome.

Hundreds of residents attended a town meeting on Wednesday to put their questions and concerns to the town’s mayor and a senior representative from BP.

Crowded into the town’s public gymnasium, resident after resident queued at the microphone to express their frustration at the pace and organisation of the clean-up effort and the time it is taking for compensation to be paid.

‘People need help and they desperately need it now,’ said one man.

‘What is the potential for health effects on us? Will it get bad enough that it will require evacuation of some type?’ asked another.

‘We got a lot of boats out here that wants to workbut it’s been disorganisedwe want to work,’ said one.

One woman thought the ‘Queen of England’ should apologise for the disaster.

Mayor Tony Kennon summed things up. He said: ‘People are in shock, they have no earthly idea how they are going to survive.’
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• Source(s): British Petroleum PLC and Sky News / BSkyB / News Corporation
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17
Jun
10

BP agrees $20 billion compensation for Gulf of Mexico oil spill victims

NEWS
BP agrees $20 billion compensation for Gulf of Mexico oil spill victims

Thursday, June 17, 2010

Embattled oil giant BP has frozen payments to shareholders and will offload billions of dollars in assets to cover costs from the Gulf of Mexico oil spill.

On the same day that the firm was dragged to the White House, where it agreed to set aside $20 billion for spill costs, executives announced a series of belt-tightening measures to save the company around $17 billion this year.

Emerging from a meeting with President Barack Obama, BP chairman Carl-Henric Svanberg vowed the firm would live up to all ‘legitimate responsibilities’, as executives moved to reassure investors the 101-year-old firm will not go under.

Regular payouts for shareholders will be frozen for the rest of the year, Svanberg said, saving the firm an estimated $7 billion and quelling a major source of public anger.

Top U.S. lawmakers had demanded the company cover all costs of the spill before rewarding shareholders with a dividend that usually amounts to around $2.5 billion per quarter.
‘The BP board decided we will not pay any further dividends this year,’ said a contrite Svanberg, as he apologised for the spill.

‘Words are not enough. We understand we will and we should be judged by our actions.’

Meanwhile BP chief financial officer Byron Grote told investors the company would try to offload $10 billion worth of assets this year to save costs.

Outlining a ‘deeply conservative fiscal approach’ in the face of still unknown costs of the spill, Grote said the firm would sell mainly ‘non-core’ assets.

BP must pay $5 billion into the escrow fund by the end of the year and a billion dollars each quarter for the remaining three years.

While the fund is being built, BP said it would set aside $20 billion worth of U.S. assets as collateral.

Grote said the 20 billion figure came from ‘negotiation with US government officials,’ he said.

‘Setting up this fund is merely a vehicle… if the fund is not fully utilised then BP would be able to pull out any residual funds that are in there.’
The White House meanwhile insisted that the fund’s value of $20 billion dollars was ‘neither a floor nor a ceiling on liability,’ and announced BP would also chip in an additional $100 million to help oil workers who have lost their jobs.

The account will not be used to pay fines or penalties that BP incurs.

Wall Street reacted positively to the news, with BP’s shares trading up around 1.5 per cent in New York at the close.

Analysts said BP, which has already spent some $1.6 billion battling the spill and made a profit of around $14 billion in 2009, should be strong enough to weather the storm even if it has to borrow more.

‘Regardless how the payments mechanically happen, BP has the financial strength to fund it,’ said Jason Gammel of Macquarie Research.

‘They have enough cash flow and quality assets that will allow it to fund that type of liability.’
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• Source(s): British Petroleum PLC
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16
Jun
10

President Obama’s Oval Office Address on BP Oil Spill & Energy

NEWS
President Obama’s Oval Office Address on BP Oil Spill & Energy

Wednesday, June 16, 2010

The United States will be fighting the oil spill for months and even years, President Barack Obama has warned. Obama said he will order BP to set up an independent claims fund.

President Obama accused BP of ‘recklessness’ in the first Oval Office address of his presidency, and swore not to rest until the company has paid for the damage it has caused to lives, businesses and shorelines.

The president said the oil spill in the Gulf of Mexico region has caused a sense of sadness and anger that goes must deeper than dollars. He spoke of anxiety that people may lose their entire way of life.

‘We will make BP pay,’ he said.

The speech capped a two-day inspection tour of the stricken Gulf of Mexico region, and was lent new urgency as scientists announced the spill could be worse than previously thought.

It comes just ahead of his meeting in the White House on Wednesday with top BP executives.
The eight-week-old Gulf of Mexico oil spill was ‘not a single event that does its damage in a matter of minutes or days,’ Obama said.

‘The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years,’ he warned.

Obama has already authorised the deployment of more than 17,000 National Guards along the stricken southern US coast.

And on Tuesday, he called on the four worst-hit states ‘to activate these troops as soon as possible’.
The oil spill meant now was the time for a ‘national mission’ to develop clean energy, he said.

‘The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now,’ Obama said.

‘Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny.’

He said he would order BP’s chairman to set up an independently managed fund to pay claims to victims.

‘Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.

‘And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party,’ Obama said.
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15
Jun
10

Obama Appoints Lawyer to Overhaul Oil Drilling Agency

NEWS
Obama Appoints Lawyer to Overhaul Oil Drilling Agency

Tuesday, June 15, 2010

U.S. President Barack Obama announced Tuesday his selection of Michael Bromwich to lead the Administration’s efforts to accelerate reforms in the regulation and oversight of offshore oil drilling.

A former Assistant U.S. Attorney and Justice Department Inspector General, Bromwich will lead the effort to reform the Minerals Management Service (MMS), restoring integrity and rigor to the relationship between federal regulatory officials and oil companies.
Bromwich will develop the plans for a new oversight structure, replacing long-standing, inadequate practices with a gold-standard approach for environmental and safety regulation.

“For a decade or more, the cozy relationship between the oil companies and the federal agency was allowed to go unchecked. That allowed drilling permits to be issued in exchange not for safety plans, but assurances of safety from oil companies. That cannot and will not happen anymore,” Obama said in a statement.
Bromwich will also oversee the reorganization of the MMS to eliminate conflicts among the different missions of the agency which include establishing safety standards, regulating industry compliance, and collecting royalties. These actions will ensure that there is no conflict of interest, real or perceived, in oil industry oversight.
U.S. Interior Secretary Ken Salazar has announced plans to split MMS into three new divisions – the Bureau of Ocean Energy Management, the Bureau of Safety and Environmental Enforcement, and the Office of Natural Resources Revenue – the most significant in a series of Interior Department reforms launched since January 2009.
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15
Jun
10

Obama tours disaster zone to set stage for national address

NEWS
Obama tours disaster zone to set stage for national address

Tuesday, June 15, 2010

U.S. President Barack Obama labelled the Gulf oil spill an environmental 9/11 as he made a fourth disaster zone trip.

The London-based energy giant’s shares meanwhile slumped 10 percent, amid deep investor anxiety about the costs it will bear for America’s worst ecological catastrophe and investor fears for the firm’s lucrative dividend.

Obama sought to engineer a pivot point following sharp criticism of his handling of the two-month Gulf of Mexico disaster.

He set off on a two-day, three-state tour of areas fearing a devastating ecological and economic blow from the massive oil slick coating a vast swathe of the Gulf, and threatening tourist resorts and teeming fishing stocks.

The visit to Mississippi, Alabama and Florida was set to bolster Obama’s message in his first Oval Office address to the American people on Tuesday night, focusing on the disaster.

He also hoped to set the stage for his showdown with BP’s chairman at the White House the next day.

Obama also apparently sought to defuse claims that he has shown insufficient empathy with local people who fear their way of life will be destroyed by the disaster unleashed by the Deepwater Horizon explosion in April.

The president munched on shrimp and mini crab cakes to show local seafood was safe and implored Americans to visit the dazzling white sands of the southern coast, aiming to boost the fishing and tourism sectors.

‘There’s still a lot of opportunity for visitors to come down here. There are a lot of beaches that have not been affected and will not be affected,’ Obama said in Gulfport, Mississippi.

White House deputy spokesman Bill Burton meanwhile said the administration was confident it had legal authority to prod BP to set up an escrow account to compensate those pitched into economic hardship by the disaster.

BP met a 48-hour ultimatum on Sunday to present a new plan to roughly triple the amount of oil it is capturing from the ruptured undersea well by the end of June, to more than 50,000 barrels, 2.1 million gallons, a day.

The company is currently siphoning up about 15,000 barrels of oil a day to a ship on the surface, about half the amount believed to be streaming into the Gulf from a well it has repeatedly failed to plug.

In London, BP’s already pummelled shares plunged more then 10 percent to 351 pence in late afternoon trade.

Earlier reports suggested BP would bow to massive U.S. pressure and decide to suspend dividend payments as its potential liability over the oil spill soars.
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14
Jun
10

Obama Begins Tour Of States Hit By Oil Leak

NEWS
Obama Begins Tour Of States Hit By Oil Leak

Monday, June 14, 2010

President Barack Obama sets off on Monday on a fourth visit to states stricken by the Gulf of Mexico oil spill in a sign of the seriousness of the disaster both for the country and his presidency.

The visit comes ahead of a rare White House prime-time televised address on the subject on Tuesday, marking a significant elevation in the Obama administration’s strategy on the oil crisis.

Meanwhile, the White House said that Obama ordered BP to set up an escrow account to pay legitimate claims and let an independent panel oversee the process.

‘The president is going down to the Gulf on Monday and Tuesday to the states he hasn’t visited – Alabama, Mississippi and Florida. When he returns he will address the nation from the White House,’ top Obama aide David Axelrod said Sunday.
Obama visited hard-hit Louisiana on his first three trips.

‘We’re at a kind of inflection point in this saga. He wants to lay out the steps we’ll take from here to get through this crisis,’ Axelrod, Obama’s senior adviser, told NBC television’s ‘Meet The Press’ program.

U.S. presidents usually reserve the formal setting of a prime-time televised address from the White House for moments of national crises, including wars and disasters.

Obama has yet to give an Oval Office address to the American people, though it had not been decided whether he will appear at the presidential desk flanked by U.S. flags when he speaks on Tuesday evening local time.

Obama’s address and the more stringent demands of BP suggest a concerted effort to be more aggressive on the disaster as angry Americans are confronted by disturbing images of oiled birds and toxic crude spoiling fragile wetlands.
BP has failed several times to seal the flow, and a first relief well that could provide a permanent solution is not expected to be ready until the second week of August at the earliest.

A containment system is siphoning up some 15,000 barrels – 630,000 gallons – of oil a day to the surface via a mile-long pipe, but estimates indicate the same amount of crude is probably still leaking into the Gulf.

The U.S. Coast Guard ordered BP to fine-tune plans to increase the capacity of its ‘top hat’ oil capture system amid fears of a time lapse while oil processing vessels are rotated.
Businesses in the Gulf region, ranging from fishing to tourism, are suffering. Some workers are finding temporary employment with BP to help in the clean-up effort, but longer-term prospects for many are bleak.

Obama is to insist at a high-stakes White House meeting on Wednesday with BP bosses that the firm establish an independently administered fund to pay out claims related to what is now the nation’s worst ever environmental disaster.

‘We want to set up a structure and protect the integrity of that fund so people get what they are due,’ Axelrod said. ‘And we want to make sure that money is independently managed so that they won’t be slow-walked on these claims.’

Thad Allen, the former Coast Guard chief who is now leading the U.S. response to the crisis, said he expected under-fire BP CEO Tony Hayward to join chairman Carl-Henric Svanberg at the meeting with Obama and administration officials.

BP is expected to suspend its next dividend payment to shareholders, due on July 27, in a bid to quell growing anger in the U.S., where many accuse it of deliberately underestimating the flow rate to try to reduce its liability, which is worked out by the barrel.
U.S. officials have suggested BP should also have to reimburse all companies and individuals that have lost business or income due to the six-month moratorium on deep sea drilling imposed by Obama last month.

Analysts estimate that including the cleanup, compensation claims, government penalties, and a host of civil lawsuits, BP’s total bill from the catastrophe could reach 100 billion dollars.

In London, BP said on Monday that its costs to date of sorting out the oil spill had risen to about $1.6 billion.

That figure includes ‘the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs,’ BP said in a statement.

The firm’s share price has fallen more than 40 percent since the BP-leased Deepwater Horizon exploded on April 20, killing 11 workers. The rig sank two days later, fracturing the pipe now spewing the oil.

In the past 55 days, oil has reached 110 kilometers of shoreline along the Gulf Coast, including parts of Louisiana, Mississippi, Alabama and Florida. About one-third of the Gulf’s fishing waters remain off-limits due to health concerns.
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