Sunday, June 13, 2010

"BP exec gives pep talk amid US tensions over spill"

As the federal government ramped up pressure on BP, Gulf states affected by the disaster also were putting the squeeze on the company, seeking to protect their interests amid talk of the possibility that BP may eventually file for bankruptcy.

The attorney general in Florida and the state treasurer in Louisiana want BP to put a total of $7.5 billion in escrow accounts to compensate the states and their residents for damages now and in the future.

"At the end of the day, my concern is Louisiana," state treasurer, John Kennedy, told The Associated Press on Saturday. "BP ultimately will do what BP thinks is best for BP."

Alabama doesn't plan to take such action, and Mississippi and Texas haven't said what they will do.

But even with Florida and Louisiana, BP might have a hard time complying, and if it did, it could hasten the company's spiral downward.

That's because as of March 31, BP had $6.8 billion in cash and cash equivalents available.

Experts say BP wouldn't necessarily need to use cash to fund the accounts the states are asking for. Instead, the company could borrow money to comply. That, however, presents a potential problem because the company's borrowing costs are likely to be a lot higher due to investor concerns.

BP said in a statement to the AP that it's considering the Florida request. It didn't address the comments by Kennedy.

"We have received a variety of funding requests from different states and have been responding to them in due course based on the particular issues raised in each," BP said, adding that it already has made grants totaling $245 million to four Gulf states and is committed to spending up to $360 million to fund construction of six barrier island berms in Louisiana.

And as to the concerns raised about a possible bankruptcy filing, BP said only that as of Saturday it was "not in discussions with" and had "not engaged any bankruptcy experts."

Along the Gulf coast, ominous new signs of the tragedy emerged on the beaches of Alabama. Waves of unsightly brown surf hit the shores on Saturday in Orange Beach, leaving piles of oil that dried in the hot sun and extended up to 12 feet from the water's edge for as far as the eye could see.

It was the worst hit yet to Alabama beaches.

"This is awful," said Shelley Booker of Shreveport, La., who was staying in a condominium with her teenage daughter and her friends near the deserted beach about 100 miles from the site of the spill.

Scientists have estimated that anywhere between about 40 million gallons to more than 100 million gallons of oil have spewed into the Gulf since a drilling rig exploded. The latest cap installed on the blown-out well is capturing about 650,000 gallons of oil a day, but large quantities are still spilling into the sea. MORE...
Howie P.S.: In the UK, the Mirror reports "PM David Cameron's oily call to US president Barack Obama." Yesterday's England-USA World Cup match didn't go too well for them, either. Meanwhile, "Tide of anger may turn an ecological tragedy into a political nightmare" is in the Guardian (UK).

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