Oil giant BP Plc, which was said to be readying defenses for potential takeover offers, has a little- known ace in the hole: a disclaimer in its Macondo spill settlement that could tack $12.6 billion onto the price tag.
A potential buyer might be forced to accelerate the payment of as much as two-thirds of the $18.7 billion in penalties the company agreed to pay the U.S. and several states, according to company filings. As it stands, BP has more than 15 years.
An option that gives the federal government and some states the ability to demand faster payment in a takeover effectively hands them a veto over any deal. Together with the company’s exposure to Russia amid sanctions and the worst oil crash in decades, it amounts to a powerful deterrent to suitors, said William Arnold, a former banker and executive at Royal Dutch Shell Plc.
I travelled to Houston just days after the Macondo blowout; not to join the media horde that was out to pillory BP and its chief executive of that time, Tony Hayward, but to attend OTC.
Needless to say, the 2010 show became dominated by the disaster as vitriol spilled forth via a host of news media bent on crucifying “Briddish Petroleum”.
The industry was in shock ... absolutely caught on the back foot; so were government agencies in charge of the US Gulf, notably the MMS (Minerals Management Service), which was rapidly dismantled and replaced by a new regulatory and safety system that included the Bureau of Ocean Energy Management.
GoM operators came under massive pressure to get their act together and to develop adequate countermeasures.
In July 2010, Shell, Chevron, ConocoPhillips and ExxonMobil committed to providing a deepwater containment response capability for the US Gulf.
Oil major BP has gone back to the US Circuit Court of Appeals in New Orleans in a bid to try and get back some of the money it has previously paid out to businesses.
The company wants restitution for some of the cash it paid to businesses as part of a 2012 settlement.
The record $18.7billion Deepwater Horizon settlement is, first and foremost, a victory for BP. The company’s shareholders clearly recognize this. After the settlement was announced Thursday, giddy investors sent the company’s shares up more than 5%, adding more than $5billion to its market value.
BP’s rating outlook has taken a hit in the wake of additional Macondo fines.
Fitch Ratings downgraded the industry giant’s default outlook from stable to negative. The firm cited outstanding fines and a dipped oil price for the slide.
Transocean Ltd., owner of the rig that sank in the 2010 Macondo disaster in the Gulf of Mexico, joined Halliburton Co. in settling all remaining issues with BP Plc.
Transocean and BP, the well’s owner, will mutually release all claims against each other, while the London-based exploration and production company will pay the rig contractor $125 million in compensation for legal fees, Transocean said Wednesday in a statement.
Transocean, based in Vernier, Switzerland, also agreed to pay $212 million to two classes of plaintiffs represented by a committee in the Macondo litigation.
The settlements were the latest in a series of resolutions since the 2010 sinking of the Deepwater Horizon in the Gulf of Mexico, which set off thousands of lawsuits against BP, Transocean and Halliburton.
LLOG Exploration plans to drill a well into a block near where oil major BP's Macondo well ruptured five years ago.
The privately-held oil and gas company - which has backers including Blackstone Energy Partners - received approval to drill a well in Blocks 252 and 253 in the Mississippi Canyon area of the Gulf in April.
An international well control training and certification body has launched a new programme aimed at reducing behavioural problems implicated in the Macondo disaster.
The International Well Control Forum (IWCF) has initiated a pilot scheme to bring in a “culture shift” which will empower people to act on safety concerns.
The programme, Crew Resource Management (CRM) has been designed to improve non-technical skills and encourage a change in attitude to raise awareness of human factors in well operations.
In early March a 30,000-pound mat of oily gunk washed up on East Grand Terre, a barrier island in the mouth of Louisiana’s Barataria Bay.
It was an ugly reminder of the blowout at BP’s Macondo well, a disaster that spewed millions of barrels of crude into the Gulf of Mexico starting on April 20, 2010.
As BP crews collected the muck, the company issued a five-year report, Environmental Recovery and Restoration, stressing that the spill didn’t do lasting damage to the ecosystem.
The 40-page report described the deleterious effects as “limited in space and time, mostly in the area very close to the wellhead.”
Oil major BP has lost its bid to reduce the maximum civil fine of $13.7billion it could face for its role in the 2010 Gulf of Mexico spill.
A US judge dismissed the company's appeal in which it argued it should pay a cap of $3,000 per barrel.
Prosecutors claim BP should pay around $4,300 per barrel.
Last week’s ruling that BP Plc (BP/)’s Macondo well dumped less oil into the Gulf of Mexico than the US government claimed may trigger a settlement before a decision on the amount it must pay after a trial set to begin this week.
A federal judge determined on January 15 that the penalty will be based on the size of the spill being 3.19 million barrels, about 25% less than estimated by the government.
That ruling, which was followed by a 5.3% jump in BP shares, reduced the potential maximum pollution fines for the 2010 spill to $13.7 billion from $18 billion and increased the incentives for a settlement.
A challenge by BP over a settlement agreement following the 2010 Gulf of Mexico oil spill has been rejected by the US Supreme Court.
The oil major had claimed the deal allowed certain businesses to get payouts, despite being unable to trace their losses to the disaster.
The court’s refusal to hear the appeal by BP means that it will have to continue making payments as it deals with the aftermath of the explosion four years ago.
Halliburton has agreed to pay $1.1billion to settle a string of lawsuits filed against the firm in relation to its role in one of the most devastating offshore oil spills in US history.
