Stock price affects interest rates for loans and the stockholders don't like losing 25% of their investment. The sooner Transocean can impress upon people the strength of their legal position the better it will be for Transocean. I think Transocean should have refused to modify the BOPs to speed up testing and should have refused to replace the heavy mud with seawater but the accepted practice was to do what they client wants when the client is paying a half million a day to use you rig. Doing away with the liability limits on the oil field lease holders will incentivize them to take less risks. Perhaps the contractors like Transocean and Halliburton need some more incentive to tell their clients "No, we will not do that. It is not safe". Now BP understand the meaning of "better safe than sorry" but how long before junior executives cutting corners to get big bonuses by looking more efficient to the senior executives forget about "better safe than sorry" again?
"... Under federal law, BP and its minority partners that own the well are responsible for all the costs to clean up the oil. But when it comes to compensating fisherman for lost catch, hotels for lost business, or towns for lost tax revenue, it gets quite murky. Estimates for total costs, including clean up, fines and damages caused to the economy range from $2 billion to $14 billion, and largely depend on when the leak can be stopped and where the oil makes landfall. BP may have some of these economic damage costs capped by a federal law that limits liabilities to $75 million, although there are efforts under way to raise that cap. BP has said itself it expects to pay more that $75 million in damages. It's also unclear how much responsibility BP's subcontractors, including oil well services company Halliburton (HAL, Fortune 500) and drilling rig owner Transocean (RIG), will bear. ..." From: http://money.cnn.com/2010/05/15/news/companies/BP_spill_regulators/index.htm Billy T comment: I think Transocean will have no luck with the more than 100 year old law limiting their losses to the value of the sailing ship that sunk.
Not so fast. Please Register or Log in to view the hidden image! If just before the mid term election, the oil companies jack up the gas price to $6.00 a gallon...talk about "drill baby drill".... $6.00 gas due to - BP liability which raises their insurance and every other oil companies insurance that must be passed on to the customer.
Perhaps, but that would be a high risk game for them as the public reaction might be: Let tropical alcohol enter and freely compete (stop taxing us for corn to alcohol support and lower food prices, which BTW are climbing at a 26 year high rate, as more farm land reverts to food production) I.e. let us drive at same cost per mile as if gasoline were less than $2/gallon like Brazilians do.
"... BP Plc said it made a breakthrough today in its attempts to control oil leaking from a damaged well in the Gulf of Mexico, successfully inserting a tube that will funnel oil to a ship on the water’s surface. The tube will capture only some of the spillage. “While not collecting all of the leaking oil, this tool is an important step in reducing the amount of oil being released into Gulf waters,” BP and government authorities said today in a statement from the oil spill’s Joint Information Center. ..." From:http://www.bloomberg.com/apps/news?pid=20601087&sid=aqoJqAsLom44&pos=1 Billy T comment: I don't know but assume that there is an annulus between the insert and the ID of the riser pipe thru which oil will still leak into the sea. Obviously the pressure inside inside the riser pipe is significantly higher than that of 5000 feet of sea water and that is less than 5000 feet of oil, so once they get a good flow going up to the ship, the pressure at the open end of the insert pipe will be less than that of 5000 feet of sea water. This lower pressure may reduce the pressure driving the oil thru the annulus space, but that may increase the amount of oil flowing from deep in the earth into the now horizontal riser pipe. This could erode the earth or imperfect concrete walls below the well pipe. Most likely then causing some blockage of the "suction insert" pipe. I.e. I suspect that this partial solution will need repair but still help reduce the average discharge of oil into the sea.
"Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given. “There’s a shocking amount of oil in the deep water, relative to what you see in the surface water,” said Samantha Joye, a researcher at the University of Georgia who is involved in one of the first scientific missions to gather details about what is happening in the gulf. “There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.” ..." From: http://www.theoildrum.com/node/6471 (The fourth article from top.)
"... - BP Plc temporarily stopped the flow from a leaking well in the Gulf of Mexico, indicating progress on its plans to plug a well that’s been spewing oil for more than a month, U.S. Coast Guard Admiral Thad Allen said. “They’ve had some success overnight,” Allen, National Incident Commander for the spill, said in an interview on WWL radio in New Orleans today. “Everybody is cautiously optimistic, but there’s no reason to declare victory yet.” ..." From: http://www.bloomberg.com/apps/news?pid=20601087&sid=ayXOaFaLrmBE&pos=8
"... BP executive in charge of the spill response, said the top kill strategy so far has not worked and talked about the possibility of a new containment device known as a lower-marine riser package cap. ..." From: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8VfExszsYeM&pos=8 Billy T comment:Next move is risky - will definitely increase oil flow rate for a few days and if completely not possible for months. The kink in the bent over riser pipe will cut off - no longer limiting the flow rate. Then they will try to close the round pipe near the well.
the real fault is with .... well you know who Please Register or Log in to view the hidden image! http://www.salem-news.com/articles/may142010/oil-cheney-ro.php
Very interesting. War hawk Cheney’s control over not very bright GWB also IMHO made much greater cost to US with the needless Iraq war. Its real purpose was to get the lucrative oil exploitation contracts ways from Frances' Total. (Why all the opposition to the war from France* and all the anti-France acts in the US - even people pouring French wine into the streets before pre-arranged CNN cameras.) Of special interest to Cheney was the fact that Russian companies that provide the same services as CEO Cheney’s Halliburton did had all the oil field development contracts. This decision of Cheney not to use acoustic activated control back up command of the Blow Out Preventer (for cases where wire control is lost) has turned out to be very much more costly than the $500,000 cost of the acoustic system. All of the BOPs used by Brazil’s PetroBras do have these acoustic controls on them. ------------------- * You may recall that French companies were not even allowed to bid on post war re-construction jobs. This was major reason why the telephone system took more than a year to restore. It, all the central switching centers, were entirely French made and repair parts from the US telephone company suppliers were not compatible with those of France.
Please Register or Log in to view the hidden image! Shirt sellers are profiting and hotel rooms are full with BP's contractors. We will need to wait a little longer to know how it effect politics.
Back a couple of pages, I told I had just bought some $40 strike puts on Transocean. (Way, way out of the money at the time) for 10 cents each. Well today the asking price closed at $1.64 - I sure called it correctly, but unfortunately I closed out the contracts when I had only 300% profit, not the 1640% I could have had. As my daddy always said: "You never go broke taking a profit." (but you can sure wish you were a little slower to do so in hind sight.)
June 5 (Bloomberg) -- BP said it collected 6,077 barrels of oil from its leaking Gulf of Mexico well in a 24-hour period using a system intended to capture more than 90 percent of the spill. “Improvement in oil collection is expected over the next several days,” ... Government scientists have estimated the well was leaking 12,000 to 19,000 barrels of oil a day, an amount they said may have increased by 20 percent after BP cut away kinked piping in order to place the cap. ..." From: http://www.bloomberg.com/apps/news?pid=20601087&sid=a8Lg5GsCx3Pw&pos=4 Lets hope it continues to capture oil, even thru hurricanes. Getting only half the leaking oil is more than twice the worst US oil disaster by August. Also note that getting the new well path, less than 1.5 feet wide, to intersect the old well's path on first try will be amazing luck. It could be late into the fall before they can try to pump concrete in to seal the leaking well.
"... The well is gushing 20,000 to 40,000 barrels of oil a day, according to an estimate released yesterday by the scientists, tasked by the government with calculating the flow. On May 27, the group pegged the rate at 12,000 to 19,000 barrels a day. The latest figure is for the size of the leak prior to June 3, when BP sawed off a bent riser pipe, potentially increasing the amount of crude escaping by as much as 20 percent. The scientists don’t have a projection for the current flow ... {But}Preliminary figures from a team of Woods Hole Oceanographic Institution scientists suggest the well could be leaking as much as 50,000 barrels a day ... The Exxon Valdez spilled an estimated 257,000 barrels in 1989. At a daily rate of 30,000 barrels, or 1.3 million gallons, the BP Macondo well disaster would generate that much every 8.5 days. ..." From: http://www.bloomberg.com/apps/news?pid=20601087&sid=ato48lERDQFg&pos=8 Billy T understands that: Mexico is protesting the re-naming of the Gulf of Mexico to the Gulf of Macondo Oil. ------------ ------------ "... {Property value} Losses may total $4.3 billion along the 600-mile (966- kilometer) stretch from the Louisiana bayous to Clearwater, Florida, the property-information service ... One of the first real estate casualties will probably be mortgage payments by hotels and restaurants if tourists avoid the area during the peak summer season ..." From: http://www.bloomberg.com/apps/news?pid=20601087&sid=aEFd_tEj12BI&pos=9 ----------- ----------- "... {BP} is considering deferring payment of the second- quarter dividend and putting the funds in an escrow account, the London-based Times reported ... BP Chief Executive Officer Tony Hayward said that the company is “considering all options on the dividend,” the Wall Street Journal reported, citing an interview. “No decision has been made,” BP spokesman Robert Wine said in a telephone interview in London. “It won’t be made until results are announced in July.” From: http://www.bloomberg.com/apps/news?pid=20601087&sid=aHGRPMBGbDEA&pos=2
"... Emergency workers and fishermen in Florida said the oil was now being washed ashore on Pensacola Beach. "It's just a line of black all the way down the beach as far as you can see in both directions. It's ruined," said Pensacola fisherman Steve Anderson. ..." From: http://news.bbc.co.uk/2/hi/world/us_and_canada/10396554.stm
C-SPAN showing hearings now. http://www.oilspillcommission.gov/page/commission-members The commissions chief finding, that "There’s no evidence at this time to suggest that there was a conscious decision to sacrifice safety concerns to save money." strikes me as political Bullshit. There many many routine and normal decisions to sacrifice safety to save money in all oil drilling and and so many other operations in so many businesses. I am fairly certain that removing the mud from a kicking well before setting the plug is a non-routine conscious decision to sacrifice safety concerns to save money. Bartlit and Grimsley worked for a law firm that defended conocophillips from a suit by BP just prior to being hired by the commission. During a break C-SPAN took phone calls. Some old coot called and was trying to explain how Bartlit was making misstatements and how Bartlit had no idea what he was talking about. The C-SPAN host asked the caller what he did for work. He was retired but had been a drilling supervisor for Exon for 40 years. Then the C-SPAN host decided to take another call rather than let this knowledgeable guy elaborate. I was irritated at the C-SPAN host because he had somebody that could help me assess the Commission's work and the host chose to move on to other clueless callers who's thoughts were irrelevant. I think one of the commission's goals is to get all the companies involved out of trouble while still appearing to be seeking truth. The tactic seems to be to spread blame all over while claiming that know action was clearly in the wrong to the point that a company should be found negligent. In my opinion based on what I read earlier from knowledgeable people and from accounts of the argument on the Rig between Transocean's guy and BP's guy I think replacing the mud with seawater before "setting the plug"on a well that had "kicked" as much as this well did was negligent. Bartlit or somebody else was making a point to mention the advantage in curing the cement of the plug when the plug is set in seawater rather than in drilling mud. I don't doubt that a plug might cure better in seawater but that is somewhat irrelevant if you might have unbalanced pressure on the plug while it is curing. Set the first plug in drilling mud and then set a second plug in seawater, don't rely on a partially disabled BOP and it's operator on the Rig to prevent a blow out. The Blow out Preventer should never be used if the drilling is being done properly. I think this commission is doing what I expected and is protecting BP. BP is no longer going after Transocean. I think the Commission and BP and Transocean and Halliburton have worked out there differences and orchestrated a high quality show that will satisfy inquiring minds so long as those minds have no oil drilling expertise and are not as cynical as I am. Maybe I am to cynical. Below From: http://fuelfix.com/txpotomac/2010/11/08/spill-panel-findings-13-reasons-for-the-macondo-blowout/ Although the panel won’t release its final report until Jan. 11, it outlined its 13 preliminary findings today. They are: 1. Flow path was exclusively through shoe track and up through casing. The commission’s initial determination that flammable natural gas flowed up through the center of the well, rather than the annulus between the drill pipe and the well hole, matches the conclusion of BP’s internal investigation. 2. Cement (potentially contaminated or displaced by other materials) in shoe track and in some portion of annular space failed to isolate hydrocarbons. The cement job at the bottom of the well and outside edges of the well failed to provide a full barrier between it and oil and gas. 3. Pre-job laboratory data should have prompted redesign of cement slurry. Laboratory tests of the nitrogen-injected foam cement used at BP’s well more than a month before it was applied at the site indicated some stability problems. That should have prompted a second look, said Fred Barlit, the commission’s chief counsel and top investigator. “We think maybe more time should have been spent getting consistent results,” Bartlit said. “Most of the lab results show this stuff works better … if you stir it for three hours and then you foam it.” But that didn’t happen on the rig — when the order is reversed. 4. Cement evaluation tools might have identified cementing failure, but most operators would not have run tools at that time. They would have relied on the negative pressure test. “BP conceded in its report that maybe if it had done a risk assessment at that time … maybe they would have run the cement bond log instead of sending Halliburton home,” Bartlit said. “But we don’t know what the cement bond log would have shown.” 5. Negative pressure test repeatedly showed that the primary cement job had not isolated hydrocarbons. Workers on the rig misinterpreted a crucial negative pressure test as being successful. 6. Despite those results, BP and Transocean personnel treated negative pressure test as a complete success. 7. BP’s temporary abandonment procedures introduced additional risk. Commission investigators questioned whether BP boosted risk by constantly changing its plan for securing and abandoning the well at the conclusion of drilling. But Bartlit also faulted BP’s decision to set a temporary abandonment plug unusually low, near the payzone. 8. The number of simultaneous activities and nature of flow monitoring equipment made kick detection more difficult during riser displacement. It is unclear whether data that could reveal kicks — or incursions of gas into the well — was actively monitored when drilling was completed and workers were in the process of displacing drilling muds with seawater in preparation for temporarily abandoning the well. 9. Nevertheless, kick indications were clear enough that if observed they would have allowed the rig crew to have responded earlier. 10. Once the rig crew recognized the influx, there were several options that might have prevented or delayed the explosion and/or shut in the well. 11. Diverting overboard might have prevented or delayed the explosion. Triggering the EDS prior to the explosion might have shut in the well and limited the impact of any explosion and/or the blowout. Workers on the Transocean rig chose not to divert the fluids coming up from the well over the rig — a choice that may have allowed gas to vent onboard, where it could ignite. A decision to trigger emergency devices also may have helped prevent a disaster, but, Bartlit noted, by the time gas got to the surface, there was a mile of riser pipe filled with it. 12. Technical conclusions regarding the BOP should await results of forensic BOP examination and testing. Although the blowout preventer was a crucial line of defense against a disaster, we still don’t know enough about the one that failed to slash through drill pipe and cut off flowing gas at BP’s Macondo well. The blowout preventer is now at a NASA facility in Louisiana where it awaits a battery of tests. 13. There’s no evidence at this time to suggest that there was a conscious decision to sacrifice safety concerns to save money. “We don’t see a person or three people sitting there at a table considering safety and cost and giving up safety for cost,” Bartlit said. But, he added, that doesn’t mean the costs of the project — about $1.5 million dollars every day — wasn’t in the back of some workers’ minds. “We know that a million and a half dollars a day is a lot of money,” Bartlit said. Workers on the rigs and at shore “want to be efficient, and they don’t want to waste money, but they don’t want their buddies to get killed. I don’t believe people sit there and say this is really dangerous, but the guys in London will make more money. It’s more complicated than that. What we’re saying is that the human beings who made the decision — shoreside and on the rig — we don’t see a conscious decision where human beings made a tradeoff of safety for dollars.
Of course there is no evidence of whatever. There is no evidence of anything much. They have yet to subpoena anyone or anything from any of the principals making the decisions. They haven't collected any evidence. Hence the weasel wording, which would be comedy on a sane news report, a funny example of a bureaucrat or industry rep trying to cover their ass. Are we supposed to believe these big oil pros run around making unconscious decisions? They manage these drilling operations in their sleep, maybe? btw: the actual subject of the weasel "report" is even more revealing: the one day on the rig. That's all the comment refers to. So it's not only weasel worded, but phrased to sound as it it referred to the entire event, the entire process of approving and drilling that well. And it is being reported that way This is a travesty. It's not serious.
I think I heard Sankar sort of complain that he and the rest of the commission did not have subpoena power. A good article even though from Fox http://www.foxbusiness.com/markets/2010/11/08/bp-spill-probe-sign-money-safety/ From the article: BP's executive vice president of safety and operational risk, Mark Bly, challenged a conclusion that BP had added risk with its handling of a cement plug. Transocean's director of special projects, Bill Ambrose, said BP was responsible for interpreting a key test, not Transocean, the owner of the rig. The degree to which the staff's initial findings track with BP's findings may renew questions about the limitations faced by the panel due to a failure of Congress to grant the commission the power to issue subpoenas. Senate Republicans blocked the panel from obtaining subpoena power out of a concern that the commissioners, appointed by President Barack Obama, would be biased against the oil and gas industry.
The commission on C-SPAN has brought in Shell as an expert and Shell is taking the opportunity to do an infomercial for itself. Shell is bragging about how safe they are and how they care about people and the environment. Excuse me Shell I have heard of Ogoniland you liars.
