For BP it’s the Money, Stupid

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There’s been way too much hand-wringing, breast-beating, meeting and talking (especially talking) about why BP has not moved quicker in fixing, cleaning up and compensating victims for the Gulf oil flood. Unless a gushing oil well is considered a leak in the earth, this is no leak.

Well, everyone can stop doing all that. None of that will happen any quicker unless and until BP is given a serious financial incentive to do so. Depending on the source, BP is anywhere from the 3rd to the 5th largest company in the world. Currently its stock has lost nearly 40% of its value since the April 20 explosion of the Deep Water Horizon rig began releasing at least 40,000 barrels of oil per day into the Gulf of Mexico.

BP did act quickly on a few matters to assure the least costly way of fixing this monumental disaster for BP. First thing it did was to usurp the control of the disaster from the US government where it rightly belonged. That was President Obama’s failing.

BP sent Tony Hayward out to be folksy with the media and American public, selling the charm and sincerity traditionally conveyed by the British accent so inexplicably alluring to Americans. When Tony asked for his life back he got it and BP sent a guy named Suttles to be their mouthpiece. Yes, as suggested by his name, Suttles is certainly more subtle than Tony H. Oh, and he doesn’t have a British accent.

Do you miss Tony? Not to worry. BP took $50 million from their 1st Quarter earnings of $6 billion attempting to mitigate its public relations nightmare. Just tune in the TV or go to youtube to watch Tony Hayward promise that BP will do right by the world in fixing the flood and its environmental & economic fallout.

BP tried to get out in front of the damage claims by making several conspicuous restitutions to Gulf businessmen. CNN somehow found a guy totally satisfied with how BP handled his claim for loss of his business. Despite their best efforts, BP’s actual handling of most claims caught up with them. When saying it would be all legitimate claims, obviously up for grabs is “legitimate”. That term can and will be litigated to death as BP fights tooth and nail to cut its losses.

The Obama administration was caught off guard by this disaster and chose to cede control to BP which had unique resources to address stemming the flood. BP took full advantage by not releasing the live feed of the flood until asked to do so by Congress. BP has uncontrovertibly lied about the scope of this disaster since day 1. As their deception became apparent, the Obama administration fought and regained control over BP’s work to cap the flood, clean up the mess and compensate Americans. Once again, President Obama was naïve, yet is coming back with a vengeance.

BP’s stock value varies by the day. June 2 its stock was down 50% suffering a $70 billion loss. June 9 it had recovered to around 40% where it has hovered as of this date. BP faces civil fines in the United States which, under a finding of gross negligence or willful misconduct, could be $4,300 per barrel. As of 6/11  this would be $11.1 billion for 2.58 million barrels flooding the Gulf. My, my – that’s nearly twice their 1st Quarter earnings.

Will BP somehow slither out of this intact and unmarred? Is this international monster of greed bigger than the United States government? Stay tuned, mate, for a bloody nasty fight.

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