from The Great Debate UK:
Facebook group defends “harassed” BP
BP’s chief executive Tony Hayward branded “the most hated man in America” may be surprised to find himself cast in the role of victim by a growing clan of web-based supporters on Facebook.
One such group ‘Support BP’ calls itself the defender of an “undeservedly harassed institution” and seeks to show that the public opprobrium BP faces over its now 60-day-old Gulf of Mexico oil spill is not universal.
Members have been increasingly vocal since a succession of strong rebukes of BP by U.S. President Obama and lawmakers at Thursday’s congressional hearing, which they are calling a “lynch mob”.
The outburst of sympathy follows an apology to Hayward from Texas Republican Representative Joe Barton on Thursday, later withdrawn, for having to agree to a deal with President Obama to set up a $20 billion fund for Gulf claim damages.
Some of the Facebook posts echoed this same spirit of regret: “My apologies as an American to Tony Hayward for the rude and insulting conduct as well as the rush to judgement by U.S. politicians on 16/7,” wrote George Gray, 50, from Pennsylvania, referring to Thursday’s hearing.
The bulk of the group’s posts are written by Americans.
Battered BP seeks a way forward
BP shares jumped almost 9 percent at the opening of the London market on news the firm would pledge cash and assets worth $20 billion to meet future claims arising from the Macondo well blowout (excluding federal and state fines and penalties).
Investors hope the $20 billion sets an informal cap or target for how much the company may eventually be forced to pay (though the announcement makes clear it does not in fact cap the company’s legal liabilities — as in fact it could not do by law).
It is also a bridge-building gesture towards the Obama administration. The company must hope the president will reciprocate by turning down the political heat and avoiding off punitive sanctions designed to cripple the company “pour encourager les autres”.
Finally, the penalty is sufficiently large it is meant to be an act of expiation. Quarterly dividends for Q1-Q3 2010 have been cancelled. BP shareholders and managers are being seen to pay a steep political and economic price, necessary as the first step for the company’s eventual rehabilitation.
IDENTIFYING WHAT WENT WRONG
Now comes the tricky part for BP and the rest of the industry. The firm, its rival operators and contractors need to be able to agree on an explanation for what went wrong and how to prevent it happening again. Until they can agree what went wrong at Macondo, and how to avoid the same problem in future, they cannot credibly resume drilling.
The Energy and Commerce Committee of the U.S. House of Representatives has sent BP Chief Executive Tony Hayward a detailed letter listing five decisions it claims were made for “economic reasons that increased the danger of catastrophic well failure”. Members will press Hayward today about the rationale behind these decisions when he appears to testify before the subcommittee on oversight and investigations.
Unfortunately for BP, from an economic standpoint, this is probably one of the worst times in history for this to happen. All they need now is a hurricane to see the lawsuits fly.
The US is probably the most litigious countries in the world. There will be an ocean of lawyers filing suits once that $20 billion starts to dry up.
This company is sure to eventually file for bankruptcy to avoid all civil claims.
There’s no way that BP will pay all the claims after the $20 billion runs dry.
That’s why they threw that out as a carrot, but once that money is gone, they will file for and receive protection from any further claims.
What amazes my is that people are still buying this stock and online magazines are calling it a “good buy.”
Let’s see how they all feel a year from now when the other shoe falls. I think Moody’s and Fitch did the right thing to downgrade BP before they could issue their worthless bonds and commercial paper.
I guess Haywood thought the bankruptcy news would sound more valid and reasonable coming from an American, rather than a Brit.
If these investors were really smart, they would ignore the “buy buy buy” crap and see BP as the poison pill that it really is.
from The Great Debate UK:
Steve Tappin on what makes a CEO tick
Being a CEO should be one of the best jobs in the world, argue the authors of a new book.
"It offers the chance to make a real difference," Steve Tappin and Andrew Cave write in The New Secrets of CEOs: 200 Global Chief Executives on Leading.
"However, real life for most CEOs is tough and many are not enjoying it."
The authors interviewed 200 CEOs for the book, which includes profiles of such leaders as Tesco's Terry Leahy , Avon's Andrea Jung, Xstrata's Mick Davis, Kraft's Irene Rosenfeld, Haier's Zhang Ruimin and Cisco's John Chambers.
CEOs are divided into five "distinct categories" characterised by similar leadership styles.
In the following video interview, Tappin, who heads up the CEO counselling firm Xinfu, discusses some major issues confronting top leaders at global firms since the financial crisis of 2007-2009, and shares his views with Reuters on how BP's Tony Hayward should manage the the Gulf of Mexico oil spill crisis.
BP’s crisis is no Three Mile Island
The catastrophic blowout at Macondo has sliced 40 percent off BP’s market capitalisation, and led analysts to speculate about lasting reductions in deepwater drilling and the resulting impact on both long-term oil supply and the fate of climate change legislation.
The underlying fear is that Macondo is the oil industry’s Three Mile Island, an accident that turned public opinion against nuclear power for three decades.
Investors are right to fear the long-term impact on the company. But they exaggerate the impact on the wider industry and the prospects for climate change legislation. BP however faces a very changed operating environment in future.
MARGINAL SUPPLY IMPACT
Deepwater and ultra-deepwater petroleum wells are just one of a suite of advanced technologies energy producers have been using to extend the peak in conventional oil production.
In its 2008 World Energy Outlook, the International Energy Agency (IEA) estimated worldwide deepwater and ultra-deepwater reserves at 200 billion barrels. This is relatively small compared with conventional oil reserves (2.1 trillion barrels) let alone total hydrocarbons (6.3 trillion barrels, excluding unproven methane hydrate technology) (http://graphics.thomsonreuters.com/ce/HYDROCARBONS.pdf).
Even complete loss of deepwater and ultra-deepwater oil production would have only a marginal impact on total energy supply in the decades to come.
Just wondering if there were any fines or penalties for the management or companies responsible for the “Three Mile Island” disaster. It would be great if someone has a link they could send me respecting this information. Thank you
from The Great Debate UK:
BP Gulf of Mexico crisis will transform the oil industry
-Kees Willemse is professor of off-shore engineering, Delft University. The opinions expressed are his own.-
The news that a huge metal cap has been successfully placed over several of the leaking oil vents at the Deepwater Horizon site marks a potential turning point in the Gulf of Mexico crisis.
It is already estimated that each day some 10-15,000 barrels of the oil that are spilling out into the ocean are being captured and diverted to ships on the sea surface.
Despite this engineering success, a complete end to the oil leakage is unlikely until new relief oil wells are completed -- a drilling process that could take most of the summer, and potentially into the autumn. This is because the newly installed metal cap is unlikely, even in the best case scenario, to stop all of the oil spilling out.
In advance of the completion of the relief wells, a potentially major new complicating factor is the arrival of the hurricane season last week.
The National Oceanic and Atmospheric Administration is already predicting between 8 and 14 hurricanes this season, with perhaps a similar number of smaller storms, any of which could complicate (or indeed force a postponement) of the ongoing mitigation and clean-up activities in and around Deepwater Horizon.
from The Great Debate UK:
How much damage will the BP oil spill cause?
-Kees Willemse is professor of offshore engineering at Delft University. The opinions expressed are his own.-
Last month’s explosion at the Deepwater Horizon rig continues to result in the leakage of an estimated 200,000 gallons (910,000 litres) of oil into the Gulf of Mexico each day.
According to U.S. President Barack Obama, “we are dealing with a massive and potentially unprecedented environmental disaster”.
While the leak is extremely serious, and Obama’s words may ultimately ring true, the leak is (as yet) not one of the top 50 biggest oil spillages from either oil rigs or tankers in historical perspective:
• Some 7-10,000 tonnes of oil are so far estimated to have leaked into the Gulf of Mexico from Deepwater Horizon. • The Exxon Valdez leaked some 36,000 tonnes of crude oil on the shores of Alaska. • The largest ever off-shore leakage of oil occurred in 1979 in the Ixtoc-1 spillage when an estimated 476,000 tonnes of oil polluted the Gulf of Mexico (Bay of Campeche). • The biggest ever on-shore spillage occurred in the aftermath of the 1991 Iraq War when an estimated 1.4 to 1.5 million tonnes was released in Kuwait by Iraqi military forces.
Most at risk from the Deepwater Horizon spill are the coastlines of Texas, Florida, Mississippi, Alabama, and Louisiana, including the wetlands near New Orleans where millions of migratory birds are currently nesting, and fish spawning.
The oil spill could also be catastrophic for the Gulf Coast’s substantial seafood industry, including oysters and shrimp.
Why final salary schemes are bad for you
— Neil Collins is a Reuters columnist. The views expressed are his own –
So you’d like to work for BP? A fine company, recognisably the same business as half a century ago, and likely to be around in half a century’s time — yup, it’s a fine choice for a career.
It’s going to be an even better one for the ambitious twenty-something, because no-one joining after next March will be able to join its final salary scheme.
These schemes are comfort blankets for pen-pushing civil servants (and, of course, snouts-in-trough British MPs) so if getting into one is the height of your ambition, then perhaps BP can manage better without you.
Schemes where the employer undertakes to pay a pension linked to your salary when you retire, whatever that is, are dying, and quite right too.
Imagine you had joined BP at 25, and at 45, stuck in a cul-de-sac inside this vast company, you got an attractive offer from a small competitor.
You’d love to do it, but matching the current value of your accrued pension rights would ruin the prospective employer. You must either walk away from your biggest asset outside your house, or resign yourself to 20 more years buried inside The Organisation.
