Today marked the beginning of the fourth hearing for BP (NYSE:BP) as well as other companies holding a stake in the Macondo well. The Federal investigators and criminal lawyers are saying that BP was fully aware of the fact that there were extreme technical problems, but did not take any action leading to the April 20th explosion of the Deepwater Horizon.
There is a joint panel combining The Department of Interior and the U.S. Coast Guard. It is the responsibility of this panel to come to a conclusion as to cause of the massive oil spill. One of the main lines of questioning focused on whether there were major equipment failures on the rig, which would have played a part in the disaster.
A shot of natural gas catapulted to the surface from under the seabed, causing the rig to explode. Despite many precautions that are in place and designed to prevent this, the explosion still happened.
In a September 2009 audit done on BP, there were numerous problem found aboard the Deepwater Horizon. Panel member Jason Mathews, questioned BP's top official for maritime safety in the Gulf Neil Cramond, "With all these flaws identified within this audit, do you think it is a fundamental flaw for BP to pay [Transocean, the rigs owner] $500,000 a day knowing that there are all these problems with the rig." Cramond said he was comfortable with how the safety issues were handled.
Showing posts with label Rig. Show all posts
Showing posts with label Rig. Show all posts
Tuesday, August 24, 2010
Monday, August 23, 2010
Federal Investigation Hearing Today, Confronting BP (NYSE:BP) and Transocean (NYSE:RIG)
Today there is a Federal investigation hearing where Federal investigators will be questioning BP (NYSE:BP) executives and managers, as well as rig owner Transocean's (NYSE:RIG) Ltd. There is a panel set to hold the hearings, and each company will be explaining disabled safety systems as well as failures of the well design, causing the worst oil spill in U.S. history.
The combined Interior Department - U.S. Coast Guard investigation has already had three hearings. The prior hearings have taken place in Louisiana where a massive amount of testimony has already been heard. This time, the hearing moves to Houston, where there are several offices of companies involved with the disaster, including BP.
There is much significance to these hearings and the federal investigation. If criminal misconduct is found to have been a factor by any or all of the oil companies that played a part, the panel can turn over its findings to the U.S. Department of Justice. Who is currently doing their own criminal investigation.
It is possible that a fifth hearing will take place. If so, it won't be until several key pieces are recovered from the bottom of the Gulf, including the blowout preventer. The hearings are very similar to that of a trial. Exhibits are presented, witnesses testify under oath, and there is cross examinations. The finding will be reported in January.
The combined Interior Department - U.S. Coast Guard investigation has already had three hearings. The prior hearings have taken place in Louisiana where a massive amount of testimony has already been heard. This time, the hearing moves to Houston, where there are several offices of companies involved with the disaster, including BP.
There is much significance to these hearings and the federal investigation. If criminal misconduct is found to have been a factor by any or all of the oil companies that played a part, the panel can turn over its findings to the U.S. Department of Justice. Who is currently doing their own criminal investigation.
It is possible that a fifth hearing will take place. If so, it won't be until several key pieces are recovered from the bottom of the Gulf, including the blowout preventer. The hearings are very similar to that of a trial. Exhibits are presented, witnesses testify under oath, and there is cross examinations. The finding will be reported in January.
Wednesday, August 11, 2010
BP (NYSE:BP): Lawsuit Settlements, Judge Panel Says No Way
In New Orleans federal court, BP (NYSE:BP) is facing hundreds of lawsuits. BP was wanting to consolidate all of the lawsuits. A panel of judges said no, this is a victory for the plaintiffs who are seeking billions in damages. There will be no lawsuit settlements.
The judge presiding over these cases is U.S. District Judge Carl Barbier. The cases include wrongful death claims, submitted by the families of the deceased workers who lost their lives caused by the explosion of the Deepwater Horizon rig. Other claims are those submitted by BP investors, Gulf Coast businesses and for environmental damage.
During the decision the panel said, "Without discounting the spills effects on other states, if there is a geographic and physiological 'center of gravity' in this docket, then the Eastern District of Louisiana is closest to it."
The judge presiding over these cases is U.S. District Judge Carl Barbier. The cases include wrongful death claims, submitted by the families of the deceased workers who lost their lives caused by the explosion of the Deepwater Horizon rig. Other claims are those submitted by BP investors, Gulf Coast businesses and for environmental damage.
During the decision the panel said, "Without discounting the spills effects on other states, if there is a geographic and physiological 'center of gravity' in this docket, then the Eastern District of Louisiana is closest to it."
Tuesday, July 27, 2010
Where or Where Has The BP (NYSE:BP) Oil Gone ?
Over 200 million gallons of BP's (NYSE:BP) toxic crude oil was spewed into the ocean. The federal government and BP has sent a small army to clean it up, but the problem is they can't find it.
The oil slick mass is now the size of New Hampshire but started out the size of Kansas. The Coast Guard flew around the BP rig site and no oil could be found. An ABC News team surveyed a marsh area and the oil eluded them as well.
A shrimper, Salvador Cepriano is one of many searching for the oil. He said hes been putting out boom but it's not catching any oil. "I think it is underneath the water. It's in between the bottom and the top of the water," said Cepriano.
The government is says it's getting harder and harder to find the crude. Thad Allen, National Incident Commander said, "It is become a very elusive bunch of oil for us to find." This doesn't mean that all the oil is gone, but experts are saying that a massive amount has reabsorbed into the environment.
The oil slick mass is now the size of New Hampshire but started out the size of Kansas. The Coast Guard flew around the BP rig site and no oil could be found. An ABC News team surveyed a marsh area and the oil eluded them as well.
A shrimper, Salvador Cepriano is one of many searching for the oil. He said hes been putting out boom but it's not catching any oil. "I think it is underneath the water. It's in between the bottom and the top of the water," said Cepriano.
The government is says it's getting harder and harder to find the crude. Thad Allen, National Incident Commander said, "It is become a very elusive bunch of oil for us to find." This doesn't mean that all the oil is gone, but experts are saying that a massive amount has reabsorbed into the environment.
Friday, July 23, 2010
Energy Bill Will Hold Companies Like BP (NYSE:BP) Oil Accountable
The scaled down energy bill is expected to be introduced next week which will hold oil companies like BP (NYSE:BP) oil accountable. Harry Reid, Senate majority leader wouldn't get into details of the energy bill, but he did say there are four main goals. To hold "BP accountable," to "create clean energy jobs," to invest in the making of natural gas vehicles, and to lessen the U.S. dependency on foreign oil.
This is due to growing opposition in Congress among Republicans and centrist Democrats. They want to see more aggressive measures to curb carbon emissions. Reid said, following a Democratic meeting that he was well aware of the lack of support for a more far reaching bill. He was confident that the efforts would continue to "lay the foundations for a safer and stronger future."
The bill is expected to have a dramatic impact on oil companies with U.S. offshore drilling operations. It can include new regulations on rig safety which would be designed to prevent another oil spill disaster like BP has had. It also may increase the liability amount if there is an accident.
This is due to growing opposition in Congress among Republicans and centrist Democrats. They want to see more aggressive measures to curb carbon emissions. Reid said, following a Democratic meeting that he was well aware of the lack of support for a more far reaching bill. He was confident that the efforts would continue to "lay the foundations for a safer and stronger future."
The bill is expected to have a dramatic impact on oil companies with U.S. offshore drilling operations. It can include new regulations on rig safety which would be designed to prevent another oil spill disaster like BP has had. It also may increase the liability amount if there is an accident.
Wednesday, July 21, 2010
Day Two of BP (NYSE:BP) Oil Spill Hearing: Proof of Negligence
Up to this point, there has been many accusations and speculation that BP (NYSE:BP) was negligent in their operations and safety at the Macondo Well. The proof came from an internal report that was brought to an investigative hearing in Kenner, Louisiana.
Two days prior to the massive explosion of the Deepwater Horizon, BP was told that there may be a problem with natural gas leaking from the Macondo Well. The warning came from a contractor on the rig employed by Halliburton. A BP well site leader Ronald Sepulvado, told the panel that he had received a different report on April 15th but not on April 18th, which warned of gas flow risks.
He also stated the workers became aware of a leak in the hydraulic system, which control the blowout preventer. In an emergency, the blowout preventer is responsible for shutting down a well. On the Deepwater Horizon Rig, the blowout preventer failed at shutting down the well.
Sepulvado continued saying, he was aware of an audit in April that showed the Deepwater Horizon's blowout preventer was well past due for a major inspection. He raised concerns to Transocean about maintenance of the blowout preventer, saying some equipment pieces were out of service for long periods of time. Transocean's response to him was they, "always told me they didn't have the parts."
Two days prior to the massive explosion of the Deepwater Horizon, BP was told that there may be a problem with natural gas leaking from the Macondo Well. The warning came from a contractor on the rig employed by Halliburton. A BP well site leader Ronald Sepulvado, told the panel that he had received a different report on April 15th but not on April 18th, which warned of gas flow risks.
He also stated the workers became aware of a leak in the hydraulic system, which control the blowout preventer. In an emergency, the blowout preventer is responsible for shutting down a well. On the Deepwater Horizon Rig, the blowout preventer failed at shutting down the well.
Sepulvado continued saying, he was aware of an audit in April that showed the Deepwater Horizon's blowout preventer was well past due for a major inspection. He raised concerns to Transocean about maintenance of the blowout preventer, saying some equipment pieces were out of service for long periods of time. Transocean's response to him was they, "always told me they didn't have the parts."
Monday, July 12, 2010
BP (NYSE:BP): Share Prices, Oil Futures, Energy Stocks
Based on the optimism that Apache Corporation may purchase about $12 billion of BP's (NYSE:BP) assets, BP's shares saw another incline. BP's reasoning for this possible sale is to help raise $10 billion to help cover the cost from the devastating explosion and sinking of the Deepwater Horizon rig.
BP saw a 5.6 percent increase to $35.96, continuing last weeks surge of 13 percent. Even though it's reported that the BP bill has reached over $3.5 billion. This lift in stock prices has helped raise energy stocks across the board. Anadarko rose 2 percent to $46.43. In an emailed statement to Dow Jones Wires, John Christiansen, Anadarko's spokesman said, " We have notified BP that we are withholding reimbursements to BP at this time."
While Apache Corporation declined 2.2 percent to $85.95. An analysts from Tudor Pickering Holt said that if Apache were to continue ahead with their possible move, it would prove their track record of purchasing mature assets and wringing the profits from them. " APA made their company buying mature assets from majors and making them work stronger/harder/longer. So it shouldn't surprise if they are hunting BP's Prudhoe assets, as reported in various newspapers over the weekend," said the analyst from Tudor Pickering Holt.
The New York Stock Exchange Arca Oil Index rose 0.7 percent to 952. While The Philadelphia Oil Service Index increased 0.6 percent to 179. The New York Stock Exchange Arca Natural Gas Index inclined 0.3 percent to 511.
BP saw a 5.6 percent increase to $35.96, continuing last weeks surge of 13 percent. Even though it's reported that the BP bill has reached over $3.5 billion. This lift in stock prices has helped raise energy stocks across the board. Anadarko rose 2 percent to $46.43. In an emailed statement to Dow Jones Wires, John Christiansen, Anadarko's spokesman said, " We have notified BP that we are withholding reimbursements to BP at this time."
While Apache Corporation declined 2.2 percent to $85.95. An analysts from Tudor Pickering Holt said that if Apache were to continue ahead with their possible move, it would prove their track record of purchasing mature assets and wringing the profits from them. " APA made their company buying mature assets from majors and making them work stronger/harder/longer. So it shouldn't surprise if they are hunting BP's Prudhoe assets, as reported in various newspapers over the weekend," said the analyst from Tudor Pickering Holt.
The New York Stock Exchange Arca Oil Index rose 0.7 percent to 952. While The Philadelphia Oil Service Index increased 0.6 percent to 179. The New York Stock Exchange Arca Natural Gas Index inclined 0.3 percent to 511.
Friday, July 9, 2010
Anadarko (NYSE:APC) Says They're Not Paying Bill From BP (NYSE:BP)
BP (NYSE:BP) sent two of their partners in the Macondo well, Anadarko (NYSE:APC) and Mitsui, bills requesting them to pay their share of the costs incurred. BP requested the payment be made 30 days from receipt or by Friday, Anadarko has refused to pay the almost $272 million requested. Anadarko owns a 25 percent stake in the company, while Mitsui owns 10 percent.
According to the joint operating agreement, if BP is found to be reckless or negligent in the events that lead up to and caused the explosion and sinking of the Deepwater Horizon rig, it would absolve Anadarko completely. This is the stance they have taken since there was first talk about the requirements of other companies involved.
John Christiansen, Anadarko spokesman said, "Multiple proceedings and independent investigations are under way into BP's actions and decisions on the rig. Although we have notified BP that we are withholding reimbursement to BP at this time, we remain committed to working with BP in good faith."
Mark Salt, BP spokenman said, "They have failed to live up to their obligations." BP said they were disappointed and will be considering their options on the next move. Mitsui hasn't responded to BP yet. They have until July 12th to pay.
According to the joint operating agreement, if BP is found to be reckless or negligent in the events that lead up to and caused the explosion and sinking of the Deepwater Horizon rig, it would absolve Anadarko completely. This is the stance they have taken since there was first talk about the requirements of other companies involved.
John Christiansen, Anadarko spokesman said, "Multiple proceedings and independent investigations are under way into BP's actions and decisions on the rig. Although we have notified BP that we are withholding reimbursement to BP at this time, we remain committed to working with BP in good faith."
Mark Salt, BP spokenman said, "They have failed to live up to their obligations." BP said they were disappointed and will be considering their options on the next move. Mitsui hasn't responded to BP yet. They have until July 12th to pay.
Sunday, July 4, 2010
BP (NYSE:BP) Sends $4 Million Bill To Partners: Anadarko and Mitsui
BP (NYSE:BP) has stated they would take full financial responsibility for the Gulf oil leak. It seems they have had a change of heart, they have sent bills to their partners Anadarko Petroleum and Mitsui. According to just released documents, BP is demanding almost $400 million from these two companies. That's close to 40 percent of the almost $1 billion BP had incurred in expenses as of May.
This is no surprise and considered common. All companies having a stake in an oil well are responsible for their percentage equal to that of their share of ownership if there is a oil spill. Anadarko's stake is 25 percent, Mitsui's is 10 percent and BP's owns 60 percent of the well. "We would expect the various parties involved in this to live up to their responsibilities," said BP spokesman Tony Odone.
Anadarko's stance from the beginning has been that BP engaged in "gross negligence" and "willful misconduct." If proved in court, Anadarko would be cleared of having to pay any of the 25 percent of the stake that they own under the joint operating agreement. In a statement from Mitsui, they've said it's way too early to draw conclusions on what has happened on the rig, but "as a 10 percent minority non operating investor, MOEX offshore 2007 is fully cooperating with those investigations."
BP demanded payment "30 days from receipt," or by Friday. A Mitsui spokesman said they have until the 12th of July to pay, but would not say if they were planning on paying or not. Anadarko spokesman said, "We are continuing to assess our contractual remedies."
This is no surprise and considered common. All companies having a stake in an oil well are responsible for their percentage equal to that of their share of ownership if there is a oil spill. Anadarko's stake is 25 percent, Mitsui's is 10 percent and BP's owns 60 percent of the well. "We would expect the various parties involved in this to live up to their responsibilities," said BP spokesman Tony Odone.
Anadarko's stance from the beginning has been that BP engaged in "gross negligence" and "willful misconduct." If proved in court, Anadarko would be cleared of having to pay any of the 25 percent of the stake that they own under the joint operating agreement. In a statement from Mitsui, they've said it's way too early to draw conclusions on what has happened on the rig, but "as a 10 percent minority non operating investor, MOEX offshore 2007 is fully cooperating with those investigations."
BP demanded payment "30 days from receipt," or by Friday. A Mitsui spokesman said they have until the 12th of July to pay, but would not say if they were planning on paying or not. Anadarko spokesman said, "We are continuing to assess our contractual remedies."
Friday, July 2, 2010
China National Purchasing 9 Billion of BP (NYSE:BP) Assets
There have been rumors flying that China National Offshore Oil Company is planning on buying around $9 Billion in BP (NYSE:BP) assets. They are refusing comment saying, "we don't comment on market rumors," said Jiang Yongzhi, a spokesman for China National.
Over the past twelve months state controlled energy companies in China have spent a minimum of $20 billion to purchase overseas oil and gas assets. This is said to meet the demand of the fastest growing economy in the world.
The Chinese energy company has shown increasing interest in purchasing a 60 percent stake that BP currently owns in Pan American Energy, this was report by The Guardian but omitted who the source of the information was from. A spokeswoman for BP, Sheila Williams also declined comment.
BP has stated they will be selling some of their assets to help cover the costs of the $20 billion that they agreed to do with President Obama. This is to be put into an account to help cover the continued costs of oil cleanup and compensation to be paid out. While BP has lost over half their market value since the explosion of the Deepwater rig on April 20th, they did see a a gain in their stock prices to 2.8 percent to 327.95 pence.
Over the past twelve months state controlled energy companies in China have spent a minimum of $20 billion to purchase overseas oil and gas assets. This is said to meet the demand of the fastest growing economy in the world.
The Chinese energy company has shown increasing interest in purchasing a 60 percent stake that BP currently owns in Pan American Energy, this was report by The Guardian but omitted who the source of the information was from. A spokeswoman for BP, Sheila Williams also declined comment.
BP has stated they will be selling some of their assets to help cover the costs of the $20 billion that they agreed to do with President Obama. This is to be put into an account to help cover the continued costs of oil cleanup and compensation to be paid out. While BP has lost over half their market value since the explosion of the Deepwater rig on April 20th, they did see a a gain in their stock prices to 2.8 percent to 327.95 pence.
Thursday, July 1, 2010
BP's (NYSE:BP) Takeover: Shell (LSE:RDSA) or Exxon (NYSE:XOM)
BP's (NYSE:BP) fallen far enough in their stock prices for them to be considered attractive to other big oil oil companies and rivals like Shell (LSE:RDSA) and Exxon Mobil (NYSE:XOM) to purchase. On April 19th BP's stocks closed at $60.09, the day before the Deepwater Horizon oil rig exploded. With yesterdays stock prices closing at $28.88, that's a loss of over 50 percent of their market value.
"In theory, either Exxon Mobil or RD Shell could consider a bid for BP," said Lucas to investors. "We focus on these two names because they have similar business models and similar global asset structures. They also bear the lowest political risk to a potential combination with BP."
This idea of a takeover by Lucas was "prompted by the gap between the current market value of BP and the intrinsic value that we see in BP." Douglas Youngston, an oil industry analyst of Arbuthnot Securities told CNNMoney if BP's stock fell below $30 a share, it would then become appealing as a possible takeover target.
Youngson said, "if the share price continues to fall, other companies may see this for the bargain it will be." He said this on June 2nd when BP's stock price hit $37.66.
"In theory, either Exxon Mobil or RD Shell could consider a bid for BP," said Lucas to investors. "We focus on these two names because they have similar business models and similar global asset structures. They also bear the lowest political risk to a potential combination with BP."
This idea of a takeover by Lucas was "prompted by the gap between the current market value of BP and the intrinsic value that we see in BP." Douglas Youngston, an oil industry analyst of Arbuthnot Securities told CNNMoney if BP's stock fell below $30 a share, it would then become appealing as a possible takeover target.
Youngson said, "if the share price continues to fall, other companies may see this for the bargain it will be." He said this on June 2nd when BP's stock price hit $37.66.
Monday, June 28, 2010
BP (NYSE:BP) UPDATE: Containment Costs, Stock Prices, and Tony Hayward
BP's (NYSE:BP) oil cleanup and containment costs continues to rise, reaching $2.65 billion according to BP on Monday. That pushes the companies expenses to over $100 million a day since the sinking of the Deepwater Horizon rig. This cost includes relief well drilling, grants to Gulf states, claims already paid out, spill response, containment efforts, as well as federal costs incurred.
After watching BP's stock plummet 6 percent, a 14 year low on Friday, today BP's shares saw an increase in premarket oil trading of 2 percent. That's a total loss in market value of over $100 billion dollars. BP was adamant in denying the fact that Tony Hayward, their chief executive was resigning. This rumor stemmed from a Russia state RIA Novositi news agency reported that a senior Russian Cabinet official said that Hayward was going to be resigning from his position at BP.
"Hayward is leaving his post, he will introduce his successor," said Sechin quoted by RIA Novosti. There is denial all around, from BP spokeswoman Carolyn Copland in London said it, "is definitely not correct." Also of London, Sheila Williams stated, " Tony Hayward remains chief executive." Mark Proegler, the U.S. BP spokesman said, "they are mistaken."
"I'm sure there has been a misunderstanding. Hayward's resignation at this time and in this place lacks logic. It would make sense that Hayward would finish his job tackling the oil spill and step down afterwards so the new CEO wouldn't have his burden on his shoulders, " said Konstantin Cherepanov oil analyst from the Swiss Investment Bank UBS.
After watching BP's stock plummet 6 percent, a 14 year low on Friday, today BP's shares saw an increase in premarket oil trading of 2 percent. That's a total loss in market value of over $100 billion dollars. BP was adamant in denying the fact that Tony Hayward, their chief executive was resigning. This rumor stemmed from a Russia state RIA Novositi news agency reported that a senior Russian Cabinet official said that Hayward was going to be resigning from his position at BP.
"Hayward is leaving his post, he will introduce his successor," said Sechin quoted by RIA Novosti. There is denial all around, from BP spokeswoman Carolyn Copland in London said it, "is definitely not correct." Also of London, Sheila Williams stated, " Tony Hayward remains chief executive." Mark Proegler, the U.S. BP spokesman said, "they are mistaken."
"I'm sure there has been a misunderstanding. Hayward's resignation at this time and in this place lacks logic. It would make sense that Hayward would finish his job tackling the oil spill and step down afterwards so the new CEO wouldn't have his burden on his shoulders, " said Konstantin Cherepanov oil analyst from the Swiss Investment Bank UBS.
Sunday, June 27, 2010
BP (NYSE:BP) Class Action Lawsuit: Class Action Attorney
One of New Orleans highly regarded and prominent chefs Susan Spicer, is suing BP (NYSE:BP) claiming that restaurants in the area have seen a decline in seafood supplies due to the negligence of the Gulf oil spill. She runs a restaurant called Bayone in the French Quarter of New Orleans.
The class action lawsuit is on behalf of all restaurants in the seafood industry that have experienced losses and damage caused by the explosion of the Deepwater Horizon Rig on April 20th. The 18 page complaint was filed in Federal Court on Friday.
Serena Pollace, Spicer's lawyer said that due to the oil spill they are expecting to lose customers because of contamination fears, higher prices, lower tourism, and the lack of availability of local seafood. " Much of the plaintiffs business is based on the unique quality of Louisiana seafood as well as the chain of delivery of that resource from the initial harvester. Because this chain of delivery cannot be maintained, plaintiffs business has been and continues to be, materially damaged," said Pollace.
The lawsuit also names as defendants, Transocean who operated the rig, Cameron who provided the blowout preventer, and Halliburton that provided the cementing services. The lawsuit is seeking compensatory and punitive damages from BP.
The class action lawsuit is on behalf of all restaurants in the seafood industry that have experienced losses and damage caused by the explosion of the Deepwater Horizon Rig on April 20th. The 18 page complaint was filed in Federal Court on Friday.
Serena Pollace, Spicer's lawyer said that due to the oil spill they are expecting to lose customers because of contamination fears, higher prices, lower tourism, and the lack of availability of local seafood. " Much of the plaintiffs business is based on the unique quality of Louisiana seafood as well as the chain of delivery of that resource from the initial harvester. Because this chain of delivery cannot be maintained, plaintiffs business has been and continues to be, materially damaged," said Pollace.
The lawsuit also names as defendants, Transocean who operated the rig, Cameron who provided the blowout preventer, and Halliburton that provided the cementing services. The lawsuit is seeking compensatory and punitive damages from BP.
Saturday, June 26, 2010
Oil Investments, Selling of Bonds, and Bond Debt: BP (NYSE:BP) and Shell (LSE:RDSA)
Oil and gas companies worldwide have borrowed a total of $83.3 billion already this year, due to BP's (NYSE:BP) oil spill disaster. This is a 41 percent increase from this time last year. The bulk of it, $53.3 billion has come in the second quarter. Traders and analysts are saying that oil companies are increasing their borrowing. This is in order to lock down funding to prevent further turmoil in the credit market and the industry as a whole.
Energy companies are also feeling the effects and worldwide have sold a total of $29.1 billion in bonds since April 20th when BP's leased rig blew up. On Monday, Royal Dutch Shell sold a total of $2.75 billion in bonds. Shell had no comment as to why or on the timing of their sale.
Andrew Karp, head of investment grade bond syndicate at the Bank of America Merrill Lynch, said that there was a high demand for the debt sales. According to Standard & Poors 500 the oil and gas sector credit spread has increased from 2.43 percent on April 28th to on Thursday reaching 3,35 percentage points.
This normally would put off borrowers until costs came down. Oil companies are borrowing while they can. Justin D'Ercole, head of America's Investment grade syndicate at the Barclays Capital said, "in late July if there's noise that the relief wells aren't working, the energy space could be a lot wider and oil companies will likely try to get ahead of that."
Energy companies are also feeling the effects and worldwide have sold a total of $29.1 billion in bonds since April 20th when BP's leased rig blew up. On Monday, Royal Dutch Shell sold a total of $2.75 billion in bonds. Shell had no comment as to why or on the timing of their sale.
Andrew Karp, head of investment grade bond syndicate at the Bank of America Merrill Lynch, said that there was a high demand for the debt sales. According to Standard & Poors 500 the oil and gas sector credit spread has increased from 2.43 percent on April 28th to on Thursday reaching 3,35 percentage points.
This normally would put off borrowers until costs came down. Oil companies are borrowing while they can. Justin D'Ercole, head of America's Investment grade syndicate at the Barclays Capital said, "in late July if there's noise that the relief wells aren't working, the energy space could be a lot wider and oil companies will likely try to get ahead of that."
BP (NYSE:BP) UPDATE: Storm Tracking
Tropical Storm Alex, the name of the first storm of the 2010 hurricane season could cause damage to BP's (NYSE:BP) oil rig and well. It also has the potential to move the oil slick closer to the Florida Panhandle beaches.
Senator Bill Nelson of Florida stated, "the greatest nightmare with this storm approaching is that it takes this oil on the surface of the Gulf and blows it over the barrier islands into the bays and the estuaries. And that is where you really get the enormous destruction, because it's just very difficult to clean up those pristine bays."
Alex's current course is heading West-Northwest and has sustained winds of 40 miles per hour and is about 250 miles from Chetumal, Mexico. As of now it does not appear that Alex path will take it directly over the massive oil slick, but as with any storm there is no predictability and their paths can change from hour to hour.
Meteorologist Karen Magginis says the "preferred scenario" for Alex to head to Northern Florida. The reasoning for this is because the oil has been slowly rotating counterclockwise. If Alex goes towards the East of it, it would send the oil out to sea. If the storms path goes directly towards the Gulf and Louisiana, it will cause the oil slick to be pushed towards Florida.
Magginis said, "we've never seen an oil spill that encompassed the Gulf like this before, end up do close to shore. We've never been in this situation before."
Senator Bill Nelson of Florida stated, "the greatest nightmare with this storm approaching is that it takes this oil on the surface of the Gulf and blows it over the barrier islands into the bays and the estuaries. And that is where you really get the enormous destruction, because it's just very difficult to clean up those pristine bays."
Alex's current course is heading West-Northwest and has sustained winds of 40 miles per hour and is about 250 miles from Chetumal, Mexico. As of now it does not appear that Alex path will take it directly over the massive oil slick, but as with any storm there is no predictability and their paths can change from hour to hour.
Meteorologist Karen Magginis says the "preferred scenario" for Alex to head to Northern Florida. The reasoning for this is because the oil has been slowly rotating counterclockwise. If Alex goes towards the East of it, it would send the oil out to sea. If the storms path goes directly towards the Gulf and Louisiana, it will cause the oil slick to be pushed towards Florida.
Magginis said, "we've never seen an oil spill that encompassed the Gulf like this before, end up do close to shore. We've never been in this situation before."
Friday, June 25, 2010
BP (NYSE:BP) Stock Price Reaches All Time Low
Due to concerns continuing to mount about BP's (NYSE:BP) future, there is added pressure on oil and gas stocks by the New York stock oil futures. These losses came after BP announced that it has to date spent $2.35 billion. This money has went to various things including the oil cleanup efforts, legal claims that have been paid, and grants to the states on the Gulf that have seen the biggest impact since the April 20th rig disaster.
The other thing that is causing renewed concern and placing pressure on BP stocks, is the pending development of a tropical storm. If this storm hits the Gulf of Mexico as predicted, it will cause possible large delays in the fuel containment efforts. Broker Nomura cut it projected BP price target from 593p to 465p.
Nomura said, "a heavy inversion of both credit yield and equity volatility suggests the market is concerned about a near term credit event around BP." BP stock fell to $26.96 a share losing another 6.1 percent. This beating their prior day low of $28.56, losing a total market value of almost 53 percent since April 20th.
"BP's market cap is eroding and its ability to finance itself in the capital market is impaired. It's anybodies guess what can happen but the fear of the market is that that liability could be so enormous that BP may have to seek bankruptcy protection," said Orr.
The other thing that is causing renewed concern and placing pressure on BP stocks, is the pending development of a tropical storm. If this storm hits the Gulf of Mexico as predicted, it will cause possible large delays in the fuel containment efforts. Broker Nomura cut it projected BP price target from 593p to 465p.
Nomura said, "a heavy inversion of both credit yield and equity volatility suggests the market is concerned about a near term credit event around BP." BP stock fell to $26.96 a share losing another 6.1 percent. This beating their prior day low of $28.56, losing a total market value of almost 53 percent since April 20th.
"BP's market cap is eroding and its ability to finance itself in the capital market is impaired. It's anybodies guess what can happen but the fear of the market is that that liability could be so enormous that BP may have to seek bankruptcy protection," said Orr.
Thursday, June 24, 2010
New York Pension Fund Suing BP (NYSE:BP) For Losses
The New York Pension Fund is saying they are suing BP (NYSE:BP) for investment losses. They are hoping to recover some of their losses from the drop that they have experienced with their stocks. Due to BP's negligence that caused the worst oil spill in U.S. history.
When the Deepwater Rig exploded April 20th, the fund held over 19 million shares according to state Comptroller Thomas DiNopoli. DiNopoli has hired the law firm Cohen Milstein Sellers and Toll, he is the sole trustee of the $132.6 billion in the fund.
"BP mislead investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we're going to hold it accountable," said DiNopoli.
One of the largest state pension funds is in Florida and holds $104 billion according to spokesman Dennis Mackee. "We're monitoring the lawsuit and all developments but we have not come to any decisions," said Mackee. The Florida pension fund covers close to 1 million active workers and retirees. They've seen a loss of almost $65 million on their BP investments.
When the Deepwater Rig exploded April 20th, the fund held over 19 million shares according to state Comptroller Thomas DiNopoli. DiNopoli has hired the law firm Cohen Milstein Sellers and Toll, he is the sole trustee of the $132.6 billion in the fund.
"BP mislead investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we're going to hold it accountable," said DiNopoli.
One of the largest state pension funds is in Florida and holds $104 billion according to spokesman Dennis Mackee. "We're monitoring the lawsuit and all developments but we have not come to any decisions," said Mackee. The Florida pension fund covers close to 1 million active workers and retirees. They've seen a loss of almost $65 million on their BP investments.
Tuesday, June 22, 2010
Judge Overturns Obama's Moratorium Due To BP (NYSE:BP)
In a surprising move, Martin Feldman, U.S. District Judge from New Orleans has blocked President Obama's six month moratorium, originating because of BP's (NYSE:BP) worst oil spill in U.S. history. The moratorium was at first going to just be for any new deepwater drilling and for only the month of May, but then it turned into a suspension of all Gulf coast drilling. Shutting down 33 of the Gulf's exploratory wells.
The complaint was submitted to the Judge by several businesses who provided many different services who are arguing the moratorium was arbitrarily imposed. In his ruling Feldman agreed, stating in his ruling that the Interior Department is assuming because one rig failed all rigs and companies involved with deepwater drilling are posing an imminent danger.
Feldman wrote, "an invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present day aspect of the availability of domestic energy in this country."
The Interior Department's response to the lawsuit is simply, the moratorium is necessary while the continued attempts go on in the Gulf to stop the crude oil and cleanup the oil spill. "A second deepwater blowout could overwhelm the efforts to respond to the current disaster," said the Interior Department.
The White House said there will be an immediate appeal.
The complaint was submitted to the Judge by several businesses who provided many different services who are arguing the moratorium was arbitrarily imposed. In his ruling Feldman agreed, stating in his ruling that the Interior Department is assuming because one rig failed all rigs and companies involved with deepwater drilling are posing an imminent danger.
Feldman wrote, "an invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs, the local economy, the Gulf region, and the critical present day aspect of the availability of domestic energy in this country."
The Interior Department's response to the lawsuit is simply, the moratorium is necessary while the continued attempts go on in the Gulf to stop the crude oil and cleanup the oil spill. "A second deepwater blowout could overwhelm the efforts to respond to the current disaster," said the Interior Department.
The White House said there will be an immediate appeal.
Shell (LSE:RDSA) Penalized By Bond Market, 2.75 Billion Debt Offering
In a 2.75 billion dollar debt offering, Shell (LSE:RDSA) received penalties by the bond market. Anadarko's notes saw a significant decline as fear mounts that profits will fall across the oil industry due to the worst U.S. oil spill in history.
Shell has the most rigs in the Gulf that are now being effected by the deepwater drilling ban. The effect is causing Shell to face higher yield spreads causing investors considerable doubt to weather the government will further increase restrictions and regulations. Anadarko has yet to see if they will be required to pay their share of the oil spill disaster. Having a 25 percent stake, if it's found that they do have to pay they would be required to pay 25 percent of the oil cleanup costs.
Levington, a managing director of corporate credit at Brookfield in New York said, "it could delay the timely projects or possibly eliminate them. It could require additional monitoring and maintenance, all of which could hurt earnings, cash flow, and returns on oil invested capital."
Shell has the most rigs in the Gulf that are now being effected by the deepwater drilling ban. The effect is causing Shell to face higher yield spreads causing investors considerable doubt to weather the government will further increase restrictions and regulations. Anadarko has yet to see if they will be required to pay their share of the oil spill disaster. Having a 25 percent stake, if it's found that they do have to pay they would be required to pay 25 percent of the oil cleanup costs.
Levington, a managing director of corporate credit at Brookfield in New York said, "it could delay the timely projects or possibly eliminate them. It could require additional monitoring and maintenance, all of which could hurt earnings, cash flow, and returns on oil invested capital."
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