Friday, September 3, 2010

BP (NYSE:BP) Becoming Government Piggy Bank?

The number of requests and the content of those requests are becoming so wide and large, it's becoming hard for BP (NYSE:BP) to be able to meet those demands, and they said if if they are banned from receiving permits to drill in the Gulf.

A bill which includes an amendment targeting BP, which would ban any company from receiving permits to drill on the Outer Continental Shelf if they have received fines of over $10 million or more in relationship to the Clean Air or Clean Water Acts within a period of seven years, or had an accident which resulted in over 10 deaths.

The only company in the world that qualifies to be banned is BP.

BP has done far more than required by law, and they've done it, for the most part, voluntarily. To saddle them with these restrictions won't just hurt BP, but will hurt those who qualify for legitimate relief, as well as fines and lawsuits against the company which they will have to pay out for.

Some people think the $20 billion put aside in the escrow fund by BP was something they legally had to do, but it was voluntary, although obviously were pressured by the Obama administration to do it.

They probably would have done something similar anyhow, but the point is they didn't have to.

What is more relevant is the $100 million the contributed to a foundation to pay for the workers who lost their jobs because of the Obama moratorium. That's why Obama doesn't worry too much about the situation, as BP is paying for it, or at least supporting a huge portion of it.

I wonder if those workers are getting unemployment and still raking in a bunch of money from BP? An investigation should be done to see if that's the case.

They've voluntarily paid out millions for advertising campaigns to the five Gulf states, and Florida even did better from tourism than last year from the free advertising.

Bobby Jindal, the governor of Louisiana, is now asking for $173 million to help promote, test and certify the seafood from the Gulf. Where will it all end?

There is also the $500 million they're paying out to a 10-year research program to study how the oil spill impacted the region.

BP executives are grownups, so I don't feel sorry for them, but they're allowing themselves to be bullied to the extreme, and Obama and others have said it's in the best interests of the Gulf and its people to have a healthy BP. And that's the truth.

A line has to be drawn somewhere, and though some have pointed out that BP has a lot of assets they could sell to raise the funds, that has absolutely nothing to do with it.

Every time BP sells off assets, it's losing revenue which could be used to pay for ongoing Gulf issues.

So it's not as simple as selling assets to raise money, it's what it does to BP over the long haul that matters. And if they're weakened so much they can't pay, it's because of politicians and their own leaders who are too cowered to draw a line in the sand. It's past time for them to do it if they're going to not only survive, but pay for the liabilities incurred from the Gulf oil spill.


  1. Governmental officials, state and federal, are so accustomed to stealing with both hands that they will make ever more outrageous demands until BP tells them to go to court if they think they have a claim.

  2. What percentage oil spillage is from natural causes?

    Faults in the rock under the sea bed are a huge unknown and even small amounts of naturally seeping oil over a wide area can soon add up to a large total.

    BP should only pay full reparation where it is proven (not estimated) to be 100% their fault.