morddwyd 08:11 14 May 2010

Is there a possibility of BP going under as a result of their problems in the US?

I know they're a massive company, but given the size of legal costs and penalties in the States, and the fact that they already have form for safety violations over there, could they possibly be bankrupted?

  birdface 08:42 14 May 2010

I am sure the profits they made in the last financial year will be more than enough to cover the costs.

  wiz-king 08:47 14 May 2010

They will be insured against claims and will counter claim against the sub-contractors who were running the rig.
More money for fat-cat lawyers.

  birdface 08:49 14 May 2010

Profits for the last Quarter.

BP said replacement cost net profit, which strips out unrealised gains related to rises in the value of inventories, was $5.60 billion (3.65 billion pounds) in the quarter, up from $2.39 billion in the same period of 2009, thanks to higher oil and gas prices.

  morddwyd 09:17 14 May 2010

"more than enough to cover the costs."

Not quite that simple.

They still need enough left to cover the vast investment costs in this field, and to pay a dividend.

If they don't the share price goes down, less money to invest and so it goes on.

It certainly going to cost them in the US courts.

  michaelw 09:36 14 May 2010

My brother is an underwater valve engineer and has been in the oil industry for the best part of 30 years. In fact he was involved in the valve manufactoring process in the type used in this instance.

He said the subcontractors were responsible for the maintanance of these valves which need constant monitoring. There is a process by which they have to be regularily cleaned as a certain amount of dirt can enter in and this has to be flushed out.

On board the rig are usually up to about five (in this instance) BP engineers monitoring the subcontractors, but it is impossible to oversee everything as there is so much going on. What happened here is that the valves didn't work as they should due to them not being properly cleaned. He told me anyone in the oil industry would know all this.

The subcontractors on this rig are American. BP is British. BP are wealthier than their US counterparts. Obama has decided therefore that BP should pay.

Hopefully all this should eventually be exposed. Unless of course there is a cover-up.

  birdface 10:20 14 May 2010

It is a relatively small leak compared to the size of the ocean was a comment from BP this morning on CNN News.
Not sure if this is what they wanted to hear.

  Proclaimer 11:44 14 May 2010

for this kind of disaster. It may have even been as low as 50 million... I am sure it was on the News but with all the election stuff going on it was a rather short piece.

  QuizMan 11:53 14 May 2010

The first clue to problems ahead is to look at the stock market. Currently the BP price is stable and a long way off its 12 month low figure. If the markets were concerned about it they would have reacted by now.

  morddwyd 20:17 14 May 2010

You're right , of course.

Always the first indicator.

However, be interesting to see how it goes once a cap is in place, and the serious enquiries begin.

As somebody said, a lot of American lawyers' kids are going to go through college on this!

  Forum Editor 22:47 14 May 2010


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