Oil Spill Lawsuits

BP has told Tony Hayward to step down and has appointed US native, Robert Dudley in his place as their new C.E.O on Tuesday earlier this week. They have also stated that they will speed up sales of their assets, as much as 30 billion dollars US, to help cover the costs of the oil spill cleanup in the Gulf of Mexico.

In their second-quarter BP reported a net loss of 17.2 billion dollars US. Compare this with their profit of 4.39 billion dollars US in the previous period. Dudley will officially assume the position of C.E.O. on October 1, 2010.

He is going to be faced with the challenge of overcoming cleanup costs and the many liabilities the company is facing. The company booked a pre-tax expense of 32.2 billion dollars US in relation to the oil spill. The company plans on selling numerous assets over the course of the next year and a half. They will also decrease their investments and cut their dividend to help pay their bills. The oil spill disaster has decreased their market value by over 70 billion dollars US so far.

Tony Hayward faced public outrage in the United States as well as criticism from lawmakers over how he handled the oil spill. This leak originally occurred after an explosion on the Deepwater Horizon rig in April. The blast killed 11 people and has wreaked havoc on the environment in the area.

Hayward stated the following in a conference call with reporters on Tuesday: “For the good of BP, especially in the U.S., it’s the right thing to step down.”

The spill lasted for three months and has tarnished BP’s reputation and future. Some analysts are speculating that BP could be broken up or become the victim of a takeover.

BP is now seeking to reduce its debt to as little as $10 billion in the next year and a half, after cutting it by $5 billion to $23.2 billion last quarter from a year earlier.

BP Chairman Carl-Henric Svanberg said that asset sales of $30 billion won’t fundamentally change the company. BP estimates the value of all its assets to be around $250 billion.

Even if most of BP’s global operations are profitable, Dudley, who will be the first American head of the former British state oil company, will need to convince politicians BP should be allowed to keep drilling in the U.S. The Gulf is home to about 25 of the 40 production projects BP plans by 2015.

The price tag for the BP oil spill cleanup has now exceeded 3 billion dollars. After Hurricane Alex left the area, cleanup workers returned to the disaster area only to find that beaches and shorelines were covered with even more thick patches of oil. One worker said that it was the worst he has ever seen it so far.

New balls of tar were discovered on the beaches in West Belle Fontaine, Waveland and Bay Saint Louis in the state of Mississippi.

On Monday BP disclosed that their costs associated with the disastrous oil spill have now topped 3.12 billion dollars US.

This leaves BP facing the possibility of a hostile takeover from rival oil groups and sovereign wealth funds. Apparently some sovereign wealth funds based in the Middle East have already proposed making a strategic investment in BP.

They were also deciding whether or not they should buy key assets from BP and provide financial backing to assist them in raising capital after they had lost almost half their market value and seen their shares plunge.

Other sources have reported that BP has been seeking a strategic investor that would purchase a 5 to 10 percent stake in their company in order to help them raise funds for the cleanup. They estimate that a 10 percent stake would be worth over 9 billion dollars.

The oil has been spilling into the Gulf for 75 days now and has spread over 700 kilometres of shoreline across four states. There is still no end in sight.

Shares in BP have fallen to a new 14-year low. The amount of cash BP is going to have to raise to pay for the oil spill cleanup in the Gulf of Mexico continues to rise, which is causing concern among investors.

At one point the share price dipped to below 300p. Many attributed this to concerns traders had over a looming tropical storm that was poised to hamper BP’s efforts to contain the oil spill even longer, allowing even more oil to gush into the Gulf.

Talk that BP may need to increase its liquidity also caused a stir among the credit markets.

However, the market seems to be mostly concerned about the potential costs that BP could face due to their liabilities towards everyone affected by the disaster. BP could be faced with litigation and lawsuits for years over the oil spill.

BP’s government and public affairs coordinator in Mississippi, Margaret Laney, said she has been appointed by BP to in Mississippi “To do what’s right to address the impact of the oil spill.” Apparently BP has hired public affairs coordinators in every state in the Gulf. Margaret admits that BP is truly sorry for the leak and realizes that it should never have been allowed to happen.

She is there to put a human face to BP, as well as being there to help interact with state and government officials. Her day to day tasks could be as mundane as choosing a caterer for a meeting that BP might be hosting, or  making herself available for those people in some stage of the claims process.

So far BP has been paying for just about everything that is required to respond to the oil spill, including everything from the wages of the Mississippi National Guard, to the hotel rooms needed to house all the government officials that are on-site. The government has been getting their money quite easily, but this might be quite a different matter for private citizens that need to be compensated in some way. They have to endure a claims process in order to get reimbursed for their losses that have arisen because of the oil spill.

Some people are afraid that once the oil well is successfully capped and the story starts to disappear from the nightly news headlines, BP might make things difficult for those who are involved in any form of litigation over the oil spill.  The state Attorney General has stated that he is already in negotiations with BP to try and keep potential lawsuits in state courts.

He is afraid that if BP lawsuits end up in federal courts, the whole situation could end up like the Exxon Valdez situation, where litigation dragged on for more than 20 years in some cases, and resulted in only small amounts of compensation being paid.

When the claim centers first started operating, they weren’t running smoothly and they were stricken with a variety of technical issues causing some claims to go unpaid.

The troubled oil giant BP is already considering filing a lawsuit of its own against its major partner in the Gulf of Mexico, Anardarko. They hope they can force them to pay their share of the multi-billion dollar clean-up costs that the oil spill is going to require.

BP has not admitted to making a decision on any potential lawsuits yet, and they declined to comment further on reports that one of their officials had reportedly accused Anardarko of not living up to their responsibilities, hinting that a lawsuit was likely in the works in the US.

On Friday night, BP issued responded to the rumours, stating that even though they were having disagreements with other involved parties, this was not going to diminish its promise to clean up and pay for legitimate claims relating to Gulf of Mexico oil spill.

The chief executive of BP, Tony Hayward, said: “Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations.”

Last week, Tony Hayward was grilled in Washington about the oil spill and President Barack Obama forced them to create a 20 billion dollar compensation fund that would be used to help pay for environmental damage and lost wages for coastal workers and businesses caused by the oil spill. In addition to this fund, there has also been over 150 lawsuits filed by individual businesses and affected people in the region.

BP has stated that they have already paid out over 104 million dollars to residents who live along the Gulf Coast for claims filed against them due to the oil spill.

Apparently they have received over 64,000 claims since the oil spill disaster occurred. They have written over 31,000 checks in the past seven weeks to help pay for the damage the oil spill has caused.

So far, they have spent a little under 1.6 billion dollars on cleaning up the oil spill. That number is going to climb dramatically as more and more people begin filing claims and lawsuits against BP.

The CEO of BP, Tony Hayward, has come under fire once again for his latest PR gaffe. This time, he made the insensitive decision to attend a yacht race over the weekend in the U.K.

Many people think this looks bad. The boss of BP hobknobbing with the rich and the elite while their oil well continues to spew oil by the thousands of gallons every day into the Gulf.

To be fair, he can’t be expected to work 24 hours a day, but given their other recent PR disasters, one would expect better judgment from the head of a multi-billion dollar corporation.

He watched his own personal yacht, named “Bob”, compete at the J.P. Morgan Asset Management Round the Island Race at England’s Isle of Wight on Saturday. His 52 foot American-built yacht finished fourth in its respective class.

I guess you could say, he now “has his life back.”

After 4 days of intense negotiations between BP lawyers and the Obama administration, President Barack Obama announced today that the oil company would have to create a $20 billion fund that would be used to pay damage claims to the thousands of people affected by the oil spill.

Kenneth Feinberg be in charge of administering the fund. He was well known for his role in running the fund for the victims of the September 11 terrorist attacks in New York.

President Obama was able to reassure the desperate coastal residents that this new fund would allow them to cover their payrolls, pay their mortgages and make their loan payments. Up until now their future has been up in the air. With no income, they have no means of supporting themselves. Even with this reassurance, he had to admit that there was no clear end in sight for the spewing oil. It could continue for months to come.

When the news was being delivered at a community meeting in Orange Beach, Alamba, cheers and applause broke out in the desperate crowd of people.

Mayor Tony Kennon said that they had asked BP for that same commitment two weeks ago and they were laughed at. He went on to thank President Obama for taking their suggestions and making it become a reality.

The White House and BP company officials haggled over details in a meeting that lasted more than four hours. This was more than double the time they had originally scheduled. The final details were worked out in a private meeting between President Obama and BP’s chairman, Carl-Henric Svanberg.

Outside the White House, BP Chairman Carl-Henric Svanberg apologized for the tragic accident and said that it should never have happened.

He also said “We care about the small people,” which annoyed quite a few people. Many people felt like he was talking down to them.

Before the day ended, he had to aplogize again for his comments. He said “I spoke clumsily this afternoon, and for that, I am very sorry. What I was trying to say – that BP understands how deeply this affects the lives of people who live along the Gulf and depend on it for their livelihood – will best be conveyed not by any words but by the work we do to put things right for the families and businesses who’ve been hurt.”

The $20 billion fund is to be held in escrow.

The Official Google Blog is using satellite imagery combined with Google Earth to show the extent of the oil spill in the Gulf Of Mexico. Here are some example pictures.

For instructions on how to use Google earth to keep track of the extent of the oil spill, check out the original article here.

At the Louisiana Seafood Festival, everything seemed great, with the pleasant aroma of grilled shrimp mixing with classic Cajun music and the blistering heat on the edge of the historic French Quarter.

Unfortunately the intoxicating smells and familiar sounds that represent New Orleans only partly covered up the fear among party-goers promoting their meals and wares that the oil spill messing up the Gulf of Mexico will potentially destroy their businesses in the years to come.

One restaurant owner stated that they had made their signature boiled shrimp sausages and that nobody was buying it.

He wondered if customers were scared of the shrimp, fearing they might be contaminated by the oil spill.

The BP oil spill in the Gulf Of Mexico has closed fishing in one third of the United States Gulf waters. Many fishermen have started fighting the oil spill in order to make money. The oil spill has turned their customers away from their products due to the fear of contamination.

The environmental and food safety authorities are assuring the public that the seafood for sale is good to eat at the time being.

This is especially difficult for area businesses that were just starting to feel a full recovery from the Katrina disaster from 2005.

The seafood festival allowed visitors to partake in such signature dishes as gumbo, jambalaya, fish tacos and oyster po’ boys as well as goodies like shrimp remoulade wraps.

One could say the festival was equal parts promotion and therapy.

They carried on with the festival to honor the fishermen that have been put out of work. They hoped it would help keep markets alive. They wanted people to know they were still alive and kicking.

Some people are under the impression that the Louisiana seafood industry, which supplies 30 percent of the United States seafood supply, is shut down altogether. This is clearly not the case.

However, supplies are definitely drying up. New Orleans-based P&J Oysters, which has been in business since 1876, stopped shucking this week due to lack of supplies, according to the New York Times.

Some restaurants at the festival offer festival-goers the option of a chicken dish, just in case they didn’t trust the seafood.

Louisiana state health officials have reported 71 cases of illnesses that have been caused by exposure to the BP oil spill in the Gulf of Mexico.

The state’s department of health and hospitals said that 50 of the reported cases involved workers on oil rigs or oil spill cleanup efforts in the Gulf of Mexico, while 21 of the cases were reported directly by the public.

The oil spill surveillance report stated that most workers reported having having symptoms that resulted from exposure to a variety of chemicals. This includes the oil itself, as well as the dispersants that are being used in the water to disperse the oil plumes.

Reported symptoms have included throat irritation, coughing, shortness of breath, eye irritation, nausea, chest pain and headaches.

Thirty of the workers that reported illnesses said that their sickness occurred after they were exposed to emulsified oil and dispersant. Eight of them needed to be treated in the hospital.

Most of the cases reported by the public were due to the odour from the oil spill itself. The only course of action for those affected by the odour is to stay indoors with their windows and doors closed with their air conditioners on.

This is just going to add to the amount of lawsuits that BP will be facing in the near future.