The crisis engulfing BP plumbed new depths last night as President Obama bullied the company into depositing £13.5billion into a fund to settle compensation claims for the calamitous Gulf of Mexico oil spill.
After a face-to-face showdown with the President at the White House, BP chairman Carl-Henric Svanberg revealed the payment meant the oil giant would be forced to suspend dividends to its shareholders until at least next year.
The news sent BP shares plunging to a 14-year low of £3.37, and is a major blow for Britain's pension funds, which rely on BP's dividend income to provide £1 in every £6 they receive each year
Since the fatal explosion in April, the value of the company - formerly Britain's biggest - has halved to £63billion.
BP's backdown came as David Cameron finally broke his controversial silence over Mr Obama's attacks on the company. The Prime Minister revealed he told President Obama not to 'go after' BP 'for the sake of it'.
Yesterday's dramatic capitulation came as U.S. officials and lawmakers escalated the ugly rhetoric over the disaster.
#4
Sorry you guys but your BIG BRITISH CORPORATION just took a shit on us and you damn well better pay.
I'm as Anglophile as anybody but here's a little item from today's Drudgereport.com about how BP chairman Carl-Henric Svanbarg "cares about the little people." He's a big, big man in charge of a big, big corporation but he cares about the little people. Sure he does. I know because I watched him say it last night on the TV news. His condescending tone of voice kinda pissed me off.
You think your pensioners are gonna have a hard time? What about the shrimp fishermen in Louisiana who are gonna be out of work for the foreseeable future? They're gonna have to start looking for new lines of work because the shrimp are all dead. These people are handing their cars back to the dealers because all of a sudden they can't make their payments because they are out of work. They're gonna be defaulting on their mortgages because they are out of work. Restaurant owners, hotel workers, fishermen throughout four states are all screwed and you expect me to cry about your pensioners? Didn't they know that BP had the worst safety record of all the major oil companies? Didn't it ever occur to them to get together and ask about that at a stockholders meeting? No? Well, I must admit I don't look to closely at all the things the companies in my portfolio are doing either. But look at it this way: when you make an investment there is always an element of risk.
And you can blame the US citizens to a certain extent who were unaware of how corrupt our Environment Protection Agency is and how cozy they had gotten with BP. Our president even took campaign contributions from BP. So there's blame enough to go around. But it doesn't let BP off the hook so don't come crying to me about your pensioners.
#5
...don't forget the enviro winnies who drive deep water drilling because they get proven reserves, much closer to shore and accessible with more reliable technology, declared off limits through their politician sock puppets.
#6
P2K I understand the point you're making. I'm sure there are responsible oil companies that can drill offshore without accident but I can guarantee you the general public is not gonna buy it. There is no way this is going to go down well for Big Oil.
Commander Zero is already reading from his teleprompter about how this crisis underscores the need for more clean, green energy. He won't want to let this crisis go to waste. Then he'll raise our taxes so we can buy more windmills from China on those easy credit terms that the ChiComs love to give us. Kinda makes me wonder how some of these crises come to be. They just dovetail so well with His agenda.
But it doesn't let BP off the hook. I get no joy from the suffering of old folks in the UK. Maybe they can get together and demand that some heads roll. But in the meantime they have to pay.
Posted by: Abu Uluque ||
06/17/2010 11:51 Comments ||
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#7
The little peoople comment pissed me off and not kinda.
I think the 20 billion is gonna be low.
Ever wonder how you could get this number before the well is plugged? I think O got his cut for limiting the hurt to BP. I think it'll be way more than 20 bill and we are gonna be stuck with the bill.
#9
The head of BP is not a native English speaker. No doubt at least part of the problem is that he went with a literal translation from his mother tongue, which probably means something like 'ordinary people'. And clearly, he is more an engineering type than a smooth politician, skilled at measuring his words. We've got a smooth talker in our honourable president -- and even he manages to insult people without intending to... although he does quite well when he intends, as well.
#12
The comment about the little people reminded me of Leona Helmsley's (Queen of mean) remark a few years back when she wasn't ground temperature (or the temperature of hell). The BP hearings today were the biggest farce I've witnessed lately (except for the rest).
#16
What pisses me off is that governments are exempt from the consequences of their legislation.
I don't know who was at fault in the BP oil rig explosion, but if half what I hear about safety regulations in mines and oil/gas drilling here in WA is true, trying to conform to safety regulations is the biggest safety hazard.
BTW, BP's stock has fallen 50% since the rig explosion. Even though BP is the largest US producer, probably far less than 50% of their assets are in the USA.
Which means their US liabilities exceed their assets (or so the market says). The rational decision for them is to extract as much cash as they can while delaying through the courts. Then make the US government come after them in UK/European/Other courts, and good luck with that.
And as I mentioned the other day, BP are buying far future oil futures at a large premium over current prices, which indicates they will pump as much oil as they can as quickly as possible to maximize short term revenue and invest that revenue outside the USA.
The Exxon Valdez oil spill happened March 24, 1989.
Back in 1989, Exxon executives, including Don Cornett, promised to take care of everyone affected by the spill.
You have my word we will make you whole again," he said at the time.
In total, Exxon spent more than $3.8 billion in clean up costs, fines and compensation.
But in 1994, an Anchorage jury found Exxon acted recklessly and awarded victims of the spill $5 billion in punitive damages. An appeals court later cut that award in half.
After nearly 15 years in appeals, the case finally reached the U.S. Supreme Court. The justices reduced that $2.5 billion in punitive damages to just more than $507 million.
20 years after the spill the legal battles were not over. Both sides were awaiting an appeals court decision to see if Exxon Mobil had to pay interest on the $507 million award.
In June 2009 A federal appeals court ordered Exxon to pay 5.9 percent interest to plaintiffs from the date of the original judgment in 1996.
In a split decision, both parties were ordered to pay their own legal fees.
In early 2010 some of the original plaintiffs received compensation checks from Exxon.
Others are still awaiting further court decisions.
The emergence of a politically unknown billionaire self-funder in the Florida Senate race is prompting top Democrats in the state to say publicly what some have been whispering for weeks: If Jeff Greene, who got rich betting on the collapse of the housing market, becomes their nominee, many in the party will have the cover they need to get behind Republican-turned-independent Gov. Charlie Crist.
Establishment Democrats in Florida, for now, are sticking with Rep. Kendrick Meek, who lags far behind in early general election polls against Crist and Republican Marco Rubio. Yet with Greene promising to drop at least $40 million of his fortune on the primary and pulling neck and neck with Meek in one survey, Sunshine State Democrats are beginning to consider the increasingly realistic prospect that their nominee might be a "meltdown mogul" -- one who collects erotic art, had Mike Tyson serve as his best man and once hosted "Hollywood Madam" Heidi Fleiss as a house guest.
Faced with such an awkward possibility, many influential Democrats indicated that supporting Crist -- who has quickly moved leftward since leaving the GOP -- or just remaining quiet would be the better of the unenviable options.
The situation is fluid. Many unknown factors hang between now and the August primary, as well as the general election -- not the least of which is how Crist and Rubio will be affected by a criminal investigation into the state Republican Party that has already resulted in a former party chairman's arrest.
But in the two months since he dropped his party affiliation, Crist has unapologetically altered his position on a variety of issues to get in line with core constituencies of the Democratic Party, and in doing so, he has managed to cut deeply into Meek's vote share within his own party. Meanwhile, Greene has already spent $4 million of his own money to blanket the state's 10 media markets with ads.
With Greene's baggage and Crist's efforts to woo liberals and moderates, senior national Democrats indicate privately that they'd most likely remain on the sidelines if Meek is not the nominee.
It all adds up to this: Crist, written off this spring after being effectively pushed out of the GOP by Rubio, could emerge as the de facto Democratic nominee this fall.
Or, as Broward County Democratic Chairman and former state Democratic Chairman Mitch Ceasar put it, Crist could head the "anybody but Marco campaign."
"If polls indicate that Greene is down by 20 points, then Crist becomes more attractive because then, at least, you stop Rubio and extremism," Ceasar said.
Posted by: Fred ||
06/17/2010 00:00 ||
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Democrats flirt with backing Charlie Crist I am sure he would enjoy that.
As if the Gulf weren't enough, the White House now faces a spill of its own making in Congress this week, infuriating old Democratic allies and putting a hold on new war funding sought by President Barack Obama.
Talks were under way Tuesday to extricate the administration by coming up with offsets to pay for new education assistance to avert teacher layoffs this fall. At the same time, renewed efforts began to salvage a $24 billion package of state Medicaid assistance, even if it means paring back a proposed 18-month fix of Medicare reimbursements for physicians.
The backdrop in both cases is a Saturday night letter from Obama calling for action on education and Medicaid assistance but giving no direction on how to pay for them -- or how to win support in a deficit-conscious Congress. Leaked in advance to the Sunday newspapers, the letter caught party leaders by surprise, and with Obama largely absent from both fights to date, it was widely seen by Democrats as more political showmanship at their expense by the administration.
Clearly annoyed, House Speaker Nancy Pelosi (D-Calif.) called White House congressional liaison Phil Schiliro to her office Monday, and House Appropriations Committee Chairman Dave Obey served notice that he would withhold action on Obama's new war funding until the dust clears on domestic spending issues.
"It was a good and constructive meeting," Schiliro said of his session with Pelosi. But the speaker's good friend, House Education and Labor Committee Chairman George Miller (D-Calif.) bluntly accused the White House of looking for political cover now, having come late to the fight of averting what many think will be a wave of public employee layoffs as state budget cuts hit home before November's elections.
"So what is this, 'We asked Congress to do this in June'?" Miller said to POLITICO, referring to the Obama letter. "Well, we asked them to do it in December."
Obey has been central to the fight over education aid and, in an interview, drew a direct link between war funding and progress on domestic priorities.
He said he would withhold action on the war funds until there was some resolution on a major economic relief bill extending jobless benefits for the long-term unemployed and popular tax breaks for individuals and businesses.
It's this package, now pending in the Senate, that carries the $24 billion for Medicaid. And going into test votes Wednesday, Democrats are still short of the 60 votes needed to cut off debate.
Posted by: Fred ||
06/17/2010 00:00 ||
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how to win support in a deficit-conscious Congress
Really? Proximity to forced retirement is the only thing that's caused the Donks to show any concern at all
Posted by: Frank G ||
06/17/2010 10:06 Comments ||
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#2
drew a direct link between war funding and progress on domestic priorities.
That'll do even more to peel off the left wing of the Democratic party, to see their so-beloved president fighting to fund his war in Afghanistan at the expense of health care and public union employees... even if what President Obama wants is both plus deficit spending.
(CNSNews.com) -- Rep. Michelle Bachmann (R-Minn.) said Tuesday that President Barack Obama is exceeding his legitimate constitutional authority in telling BP it must set up an independent fund, not controlled by the company, for compensating victims of the Gulf oil spill. She described the administration's policy as an action "that's all about extortion."
"Private companies need to be held accountable but not necessarily to the executive branch," said Bachmann. "It seems to me there's a misreading of the Constitution and a misunderstanding of jurisdictional limits from this White House on what the extent of executive power is. They don't seem to understand that and it--now it seems that it's all about extortion--and that what they want to do is create a pot of money for themselves that they can control and that's not what the Executive is supposed to do. There is a real misreading of jurisdictional limits, and they continue to stretch those limits beyond all bounds."
Bachmann, who was speaking to a gathering of bloggers held at the conservative Heritage Foundation in Washington, D.C., criticized the administration's response to the massive oil spill in the Gulf.
The conservative from Minnesota said she was particularly bothered by the call President Obama made Monday--later reiterated in his Oval Office address Tuesday night--for BP to set aside money for reimbursements to victims of the Gulf oil spill that would be administered independently, taking control of the money away from the company.
"The president just called for creating a fund that would be administered by outsiders which would be more of a redistribution-of-wealth fund, and now it appears we're going to be looking at yet one more gateway for more government control, more money to government," she said. "If there's a disaster, why is it that government is the one who always seems to benefit after a disaster?"
The proposed fund that the administration wants BP to create would go to reimburse individuals and businesses along the Gulf Coast that make claims as a result of the oil spill. But the money, which belongs to BP stockholders, would be taken out BP's control and the administration has not clearly stated what due process of law would be observed in distributing the money.
The Fifth Amendment to the Constitution was ratified specifically to prevent the government from taking or redistributing private property without due process of law. The amendment says: "No person shall be ... deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation."
Posted by: Fred ||
06/17/2010 00:00 ||
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yeah, like the constitution means anything to this administration :(
Posted by: abu do you love ||
06/17/2010 2:23 Comments ||
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#4
The bullhorn-in-chief at work:
"What do we want?"
"Your money!"
"When do we want it?"
"Now!"
Posted by: Grenter, Protector of the Geats ||
06/17/2010 15:06 Comments ||
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#5
Little being uttered about BP's tens of millions in campaign contributions to presidential candidate Obama. Some poetic justice herein for BP and the faunting POMs who supported and funded Manch-Candidate Obama I suspect.
#6
BP appears to have been coerced into setting up a $20 billion dollar compensation fund. While some of Obama's work might be Presidential, he has created a lot of photo opportunities for himself as he champions local fishermen, and environmentalists.
Obviously, Capping operations must be better regulated. Obama is veering towards over-regulation. But, damn BP; they set back safe off-shore work.
As for the compensation-without-due-process: National Security Directives allowing same, are given constitutional protection. So-called "balancing" doctrines - security v liberty, etc - grant paramountcy to the executive, subject to Congressional approval of Presidential "conduct". Lesson: be careful who you help put in the highest office.
Posted by: Oscar Flese5163 ||
06/17/2010 20:23 Comments ||
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#7
"Bills of attainder, ex post facto laws, and laws impairing the obligations of contracts, are contrary to the first principles of the social compact, and to every principle of sound legislation. ... The sober people of America are weary of the fluctuating policy which has directed the public councils. They have seen with regret and indignation that sudden changes and legislative interferences, in cases affecting personal rights, become jobs in the hands of enterprising and influential speculators, and snares to the more-industrious and less-informed part of the community." James Madison, Federalist Number 44, 1788.
A multi-volume chronology and reference guide set detailing three years of the Mexican Drug War between 2010 and 2012.
Rantburg.com and borderlandbeat.com correspondent and author Chris Covert presents his first non-fiction work detailing
the drug and gang related violence in Mexico.
Chris gives us Mexican press dispatches of drug and gang war violence
over three years, presented in a multi volume set intended to chronicle the death, violence and mayhem which has
dominated Mexico for six years.
Rantburg was assembled from recycled algorithms in the United States of America. No
trees were destroyed in the production of this weblog. We did hurt some, though. Sorry.
