BP and Obama

I can bear it no longer – finally I have to vent my spleen about BP and B.O.

Yes, this is a terrible environmental disaster, and will have awful repercussions for those living all around the Gulf Coast, and on the wildlife, and on the families of those killed. I think we are all agreed there.

Yes, BP have to take on the responsibility for these events as the controlling party in the drilling operation, but let us not forget that the rig itself was owned by Transocean (a US company), and that the part that failed was the direct responsibility of Halliburton (a company with close links to Dick Cheney), and these companies are rarely mentioned.

Yes, it is right to compensate those who have been affected by the spill, but the US administration blaming BP for the results of decisions that the adminstration has made since the spill is unfair, and I doubt that it is legally justifiable.

Since BP must bear the responsibility, it is right that their shareholders take their stake of the pain, and they (and I’m one of them) have done so in that the market value of the company has dropped by about 45%. I think, though, that it is time to face some of the facts:

  1. BP made profits of USD8bn in the first quarter of this year.
  2. Oil prices have remained above $70 per barrel all year (except for momentary fleeting glimpses of the upper 60s), and therefore BP can continue to expect to be profit generating.
  3. Even if the clean-up effort (<2bn so far) goes on all year, BP have the cash reserves and income to pay for this, including compensation payments to all interested parties.
  4. The dividend amounts to approx $1.5bn per quarter, and if BP has the cash to pay it, then no government should be able to prevent it – shareholders have taken a huge amount of pain, why punish them needlessly to make a point?

I think, though, that my main issue with the Obama administration is that they don’t really seem to be doing anything to try to prevent the flow of oil (and of course they can’t). All they want to do is to punish BP, and make BP throw money at the US administration (to pay for their unemployment etc), rather than concentrating on using their expertise to stop the flow of oil and to ensure that as little damage as possible is done. BP’s punishment will be that they lose a year’s worth of funding for capital investments and growth (in terms of the cash not being available for investment), and the huge loss of reputation world-wide. Obama can’t use BP’s issues to either distract from or pay for the USA’s other problems.

Advertisements
This entry was posted in Politics and tagged , , , . Bookmark the permalink.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s