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How to reconstruct BP

Robert Peston | 09:19 UK time, Wednesday, 21 July 2010

BP's sale to Apache for £4.6bn of oil and gas assets in Canada, the US and Egypt takes it most of the way to hitting its short-term target for the funds it wants to raise to meet the vast costs arising from the Macondo oil spill.

BP petrol stationThe chairman, Carl-Henric Svanberg, says there will be other opportunities to sell assets that he claims will be worth more to others than to BP. Or to put it another way, the company has taken a strategic decision to shrink.

But how much smaller will BP become? Will it ultimately decide that all or most of its market-leading American operation is worth more to another company that unlike itself isn't regarded as public enemy number one in the US.

At the moment, BP hopes it can retain a substantial US presence. An exit would represent a u-turn on the strategy that drove the company for the best part of the last 20 years.

This would not be an apposite moment to make the definitive judgement of whether to exile itself from America. Emotions in the US about BP are running so high - witness the determination of Washington lawmakers to implicate BP in the release of the Lockerbie bomber - that it's impossible to take a reliable reading of whether BP will be non-grata among American politicians and citizens forever.

That said, the recent progress on the twin imperatives of fixing the Gulf of Mexico leak and avoiding bankruptcy means the board of BP has to start preparing itself to make the really tough decisions.

In that sense, the 28% recovery in BP's share price since the end of last month is a message to the directors - especially the non-executives - that reconstruction is about to supersede firefighting as the priority.

These are the questions.

Quite how radical does BP need to be in breaking up its vast sprawling network of assets? What is the optimal size and structure for an oil company to manage the risks that have been exposed by the Macondo disaster?

And then there's that awful conundrum for a unitary board of BP's sort: to win back the confidence of shareholders and of the US government, do BP's non-executives need to start negotiating the departure terms for the chief executive, Tony Hayward, the chairman, Mr Svanberg, or both?

Update, 11:32: I hadn't appreciated the full financial significance of BP's current attempts to cap the Macondo well (as opposed to sealing it, which is the next stage).

If BP succeeds in shutting off all flow of oil from the Macondo well for an extended period through the installation of the so-called capping stack - which may happen this weekend - that would go some way to proving that the design of the well is not fundamentally flawed, that the well has integrity, that it can withstand significant pressure without springing new leaks.

This really matters, because much of the criticism of BP - especially from Congress - is that the company cut corners in the design of the well to save money; and that charge would be much harder to prove if the well remains intact when subject to increased internal pressure.

There would be a number of positive benefits for BP from such an outcome - one of which would be a diminution in the size of potential fines and penalties it faces to the tune of several billions of dollars.

Also, it would imply either that more-or-less any oil company could have suffered the same disaster, or that the contractors on the project, Halliburton and Transocean, have a great deal to answer for.

Either way, BP would find itself in a much better place - one in which the Macondo disaster became more of an industry-wide issue than just a horror story called BP.

Comments

  • Comment number 1.

    The One thing they don't need to do is take "advice" from ghastly Americans!!!

  • Comment number 2.

    BP has got too big and is unmanageable ... it needs to redefine itself and its strategy and invest in new technologies and enter new markets

    The question is whether the existing management are up the job ... if not ... sack them ... even the Gulf of mexico plays a small part in BP's future ... Can BP wean itself off over reliance on crude oil and do something with vegetable and other oils, electricity, solar, nuclear, hydrogen cells and new technologies ... that is its long term future.

    Long term planning is the key ... where does BP wish or need to be in 10, 20 and 30 years into the future.

    The USA does not even need to be a big player in BP's future ... BP has to be prepared to go its own way ... if the USA 'keep going after BP'.

    Leave 'em all behind!

  • Comment number 3.

    Tony Hayward is a company man and a geologist.

    In the age of the "CEO tart" and MBA brigade, we should keep the genuine business people where possible.

  • Comment number 4.

    I reckon BP are currently in the limelight for two reasons:

    Firstly they made a large diameter cock up whilst drilling a small diameter hole.
    And
    Secondly it gives U.S. politicians a convenient scapegoat to deflect the attention of the U.S. citizens away from their current financial woes.

    So BP were presumably drilling the right hole in the right place, but went about it the wrong way at the wrong time.

  • Comment number 5.

    Is this little more than short termism. It is good for a large company to refresh its strategy periodically but is the immediate need for cash an appropriate reason for change course now? Seems defensive and weak when once the Gulf disaster is sorted and the Lockerbie accusation neutralised is it not business as usual and then the right time to review - perhaps under new management?

    We should also know the pathology of the causes of the disaster including the role played (or not) by senior management and any culpability before they are handsomely dealt with!

  • Comment number 6.

    It really is rather rich, for US politicians to be complaining about the UK or Scottish government being influenced by BP over the release of the Lockerbie bomber, especially as the allegations are probably not true. Surely US foreign policy is almost entirely designed to serve the interests of US companies, so it is very much a matter of the pot calling the kettle black.

    It is much more likely that the Scottish justice ministers decision was influenced by the probability that McGrahi's appeal would succeed. Adding to the list of cases where the British police and judicial system, under media pressure to find a culprit for a particular crime, has managed to convict an innocent person.

  • Comment number 7.

    Tony Hayward is a good manager and BP woulb be foolish to remove him at this point. Yes, mistakes were made in the Gulf but he has only been in the job for three years and a lot of reorganising was and is needed after his reign.

  • Comment number 8.

    Robert,

    Speaking as a physicist, and from experience with the common conflict between engineers and finance, I imagine the conversation in the gulf prior to the spill would have went like this:

    Engineer: I think we have a problem with the BOP.

    Management: So?

    Engineer: We need to bring it up the surface and repair it.

    Management: That will be too expensive. We will ignore it/remove it/switch it off, keep quiet and hope for the best.

    The decision to cut corners will always be taken by the bean counters.

    The size of the company and who is on the board is irrelevant.

  • Comment number 9.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 10.

    @ 8. At 11:29am on 21 Jul 2010, newblogger wrote:

    > Management: That will be too expensive. We will ignore it/remove it/switch
    > it off, keep quiet and hope for the best.

    This also happened with the banks. Imagine the discussion:

    Risk assessor: I think we have a problem with some of those mortgages.

    Banker-dunce: So?

    Risk assessor: We need to bring them up and assess their real worth.

    Banker-dunce: That will be too expensive. We will ignore them/sell them on/splice them into collateralized debt obligations, keep quiet and hope for the best.

    And thus toxic derivatives were born.

    > The size of the company and who is on the board is irrelevant.

    The bigger they were, the more they swindled.

  • Comment number 11.

    @ 7. At 11:23am on 21 Jul 2010, Jim Lawlor wrote:

    > Tony Hayward is a good manager and BP woulb be foolish to remove him
    > at this point.

    He doesn't understand Americans, and he doesn't speak American. I don't know if it's possible for a Brit to learn American without living there for years, but I'll give him a few tips:

    *** TIPS FOR MR HAYWARD ***


    1) You can't go over there acting like Mr Bean without the Americans thinking that you ARE Mr Bean. They are far less subtle and more direct than us.

    2) Americans feel superior to foreigners, so you must appear subservient, even if you don't feel subservient.

    3) If you trot out a list of excuses as long as your arm, they are unlikely to be very impressed. That soft-soap might work over here, but not there - you won't last 5 minutes.

    If you remember those 3 rules, you'll be OK, else they'll feed you to the lions.

    Good luck - you'll need it.

    Jacques

  • Comment number 12.

    The fierce attempts by US Senators and the Secretary of State to pin the Lockerbie bomber's release on BP must surely be ample proof to the board that pulling out of the US is their only realistic medium-term option. After all, the charge is utterly absurd and flies in the face of the evidence.

    The release was made conditional on al Megrahi's appeal being dropped. Clearly, the authorities feared the appeal would be successful, casting them in a very poor light if he died during or shortly after the proceedings. Far better, then, to claim the moral high ground by showing compassion and releasing him, while also ensuring that the arguments of the appeal were never heard in court.

    This is just not the kind of decision where any rational politician would be influenced by commercial considerations. Naked self-interest, yes, but money, no. The stakes were simply too high.

  • Comment number 13.

    Robert, I find the whole BP saga mystifying.
    BP agreed to US demands to not pay a dividend for a year.
    BP agreed to US demands for a $20 Billion escrow fund administered by the US.
    BP were then specifically excluded by US law from any further deep water drilling.
    BP were subjected to personal attacks by that nice Mr Obama.
    If I had run the firm I would have forseen exactly what the American Government would do (with NO help from our spineless UK Government). They were thrown to the wolves (probably egged on by the other American oil majors). I would have walked away at day one and told the American Government to fix it themselves and send me the bill. BP would have been no worse off than they are now. Don't forget it was American sucontractors who may have contributed to this disaster by financial engineering. No one seems to apportion any blame to Trans Ocean or Halliburton (both American run companies) for their part in this.
    We still await the official enquiry into the causes of this disaster but from BP's response so far, they seem to be admitting that they were grossly negligent (I hope not).

    Many British companies, over the years, have tried to do business in the USA and have ultimately failed... I wonder why that is?

  • Comment number 14.

    When things have calmed down BP should re-brand themselves in the US (and the rest of N & S America) as AMOCO again from pertol stations to HQ's and offices etc.

    The Americans will soon forget as they re-focus on their declining economy/status/standard of living as the depression takes hold and the dollar declines.

  • Comment number 15.

    I have just returned from a 24 day visit to the US visiting family and friends, so no subject or point of view was out of bounds. Only once was I asked about the BP spill and the enquirer was interested in how it is being reported in the UK, there was no animosity in the question.

    In newspapers the story has been relegated to an inside page, only returning to the front page when something important happens, such as the successful capping. TV is similar.

    The person appointed to head the independent compensation agency said on national TV that "BP deserved credit" for the effort they have put into getting the compensation payments up and running so efficiently.

    Driving in the mid-west, where there are many BP stations, I saw no evidence of sabotage, as has been reported, and they seemed to be doing plenty of business, there was no evidence of a boycott.

    BP's PR and advertising seems now to be on the ball. They have americans talking to americans using the form of words that creates the message that they want to hear.

    I conclude that this story is now much bigger in the UK than the US, and that the UK media should do us all a favour by taking the emotion out of the story as has already happened in the US. As long as BP continue to compensate as they have promised, and as they are doing, they will survive and thrive in the future.

  • Comment number 16.

    OK I am now going to be a Grumpy Old Man..

    What happened in the Gulf of Mexico is BP's fault and they should clear it up. As far as I can see they are doing this and as stated above have been complimented on their efforts. In addition as DEMANDED by the US government they have, as stated above;
    BP agreed to US demands to not pay a dividend for a year.
    BP agreed to US demands for a $20 Billion escrow fund administered by the US.
    BP were then specifically excluded by US law from any further deep water drilling.
    BP were subjected to personal attacks by that nice Mr Obama.
    At this stage I was not unhappy the demands where what could be expected and the cost of being responsible for this disaster.
    Now however I think it is time to tell the US Government and "lawmakers" to get lost... How dare they attack BP or the British and Scotish government over the Lockerbie release.
    If they want to do this maybe we should ask them what they are doing about BOPAL and the executives they are protecting in the US for over 20 years.
    Also maybe we should ask the UN to set up an enquiry into Cheney, Halliburton and the CORRUPT awarding of contracts for the re-building of Iran.
    Tell them to get off their moral high horse and put there internation al affairs in order and clear out the corruption, illegal and immoral practises used by US companies.
    I am furious about this and the British media's apparent support of these US "Lawmakers" no doubt egged on by the lobbying for the US Oil industry. They are looking more and more like poddles / lapdogs of the Americans and not the independant media we should have.

    Yes this is a rant and I in no way apologise!!!

  • Comment number 17.

    Hello
    I have to agree with the contributors comments below:-

    ==========================================================
    Engineer: I think we have a problem with the BOP.

    Management: So?

    Engineer: We need to bring it up the surface and repair it.

    Management: That will be too expensive. We will ignore it/remove it/switch it off, keep quiet and hope for the best.

    =============================================================
    There not nearly enough Engineers at the top of the tree in British Industry these days. Your average manager / director (MBA fresh in Hand) has no idea what the average engineer is talking about. This leads to a communications breakdown and unnecessary / stupid risks being taken as a result. I wish I could say that BP was in isolation but I see the same model of management ineptitude and communication breakdown in every aspect of industry I visit.

    As for the bean counters,( like Robert Peston, joking honest ), when I did my degree in Engineering I had to study profit and loss accounts / balance sheets and understand the company accountant as a result. I have never seen any requirement in an accountancy course for an accountant to understand anything about the wider world outside of their basic remit. Therefore the ability of these people to assess risk is flawed from the onset.

    I would dearly like to see the balance of power / decision making in many British companies re-dressed back in favor of engineers and highly skilled staff. It will probably lead to a safer world albeit not such a profitable one.

  • Comment number 18.

    BP needs tighter security at their sites.......

  • Comment number 19.

    RP

    Why should Tony Hayward take responsibility for this accident/disaster by being removed just because the Americans don't like him. We don't know why the BOP failed or what caused it to fail. Until we do BP are taking interim responsibility as they should. Or do we 'hang' people for crimes before we prove guilt?

    Any chance of the cartoon cut-out pic of yourself on your site being removed - it's is very scary - I have to put a piece of paper over it - it's horrible!

  • Comment number 20.

    In fact thats a good general rule these days.

    Company's need to invest more security, background checks, and contingency plans.

  • Comment number 21.

    Now will Goldman take a leaf out of BP's book and pay compensation to its clients who lost money on raw deals ?

    Was Cameron brave enough to mention such a thing to Obama ?

  • Comment number 22.

    American politicians will use any event to make themselves seem concerned. They are all wind-socks and will be granting tax credits to BP operations once this is all settled. The release of the terrorist was a grand mistake and there are indications that oil was part of that deal, but countries let evil-doers go all the time for business reasons. Foreign Offices and State Departments are the arm of the business community in each nation. They generally represent the private sector and not the nation in such matters. The problems today are the imbalance between the business of government being business and the interest of the nation and the good of the people. When a company has enough assets to deal with such events they have options.

  • Comment number 23.

    #2

    You're right. BP certainly needs to invest in new technologies and enter new markets.

    Sadly though I don't think its management understands this as it is far too focussed on the short term whereas of course energy is very much a long term industry.

    There is also the strong possibility that this accident in the GoM might well have been avoided had they invested in new drilling technologies as indeed their Norwegian competitors are now doing. Some years ago they were invited to invest in a UK project to develop a seabed drilling system which would have removed the need for large floating rigs in deepwater.

    The Norwegians are now building such a system.

  • Comment number 24.

    #10

    The bigger they were, the more they swindled.

    Whilst I agree this is true of the banks; but I have a feeling BP could shrink and restructure and we will still have another oil spill in 20 years time(maybe not of the same scale though).

    #16 No need to apologize.

    I agree the level of rehetoric directed at BP has been excessive and David Cameron should have said as much. At least Alex Salmond and Kenny MacAskill have shown more backbone.

  • Comment number 25.

    If you live on or near the Gulf Coast, you most likely are going a little nuts about about BP shrinkage, BP reconstruction.
    You probably think that BP sell-offs are about two things:
    a) burying its ostracised, greasy name under the names of other oil names, like Apache and
    b) perhaps escaping liability under a different corporate structure.
    Three (3) federal appeals court judges (all with financial and other ties to big oil) rejected Obama’s proposed drilling moratorium in the Gulf of Mexico. Meanwhile, the BP spill is seeping into Lake Pontchartrain, north of New Orleans.
    The lives and livelihoods of fishermen and oyster-shuckers are being destroyed. Disease warnings were being issued to Gulf residents and alarming toxin levels were beginning to be found in clean-up workers.
    But three (3) federal appeals court judges (all with financial ties to big oil) rejected Obama’s proposed drilling moratorium in the Gulf of Mexico. I don't understand why the Gulf-Coasters are so meak and mild.
    Are they getting used to the sheen and sludge of crude oil - in the same way that persons in the Niger Delta have gotten used to Shell's sheen, shine and slime. To these Nigerians most survivors know little else. Average life is 48 years for women, 47 for men, and 41 if you escape subsistence farming & petty trading to become an oil worker. Years of life given away to Shell profiteering and its failure to clean up the Delta spill.
    Back to the Gulf, last month, some Ecuadorian indigenous leaders visited the Gulf Coast, the Houma of Louisiana. The group took a boat tour through bayous where the Houma have fished for generations. Mariana Jimenez, from Ecuador's Amazon, reached over the side of the boat and grasped dead oily marshland. So where is BP with its compensation? Are the Houma simply expendable - collateral damage for BP's mistake?
    Big Oil Blowback
    The corporations (not just oil corporations) assume it's their God-given right to control this planet. They have one commandment: maximize profits. They will drill where they want; they will destruct ways of life; they will find clever ways around compensation and clean-up.
    What I conclude from the Gulf Spill is that oil companies are out of control, perhaps breathing too many fumes.
    What BP is doing now, I believe, is cutting and running and bedamned the Gulf People. BP's got business elsewhere, regardless or how it restructures and what it calls itself.
    If the American Government had any guts, it would freeze BP assets, hold BP suspended, until the dust (oil) settles and we can truly see what is the extent of the damage.
    I continue to wonder: Who runs America – the corporations or the elected Government?

  • Comment number 26.

    @ 24. At 3:07pm on 21 Jul 2010, newblogger wrote:

    > Alex Salmond and Kenny MacAskill have shown more backbone.

    Did they have backbones or boneheads? It's hard to tell with those two.

  • Comment number 27.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 28.

    I would love to see BP totally disinvest from the US.

    At the same time we could have some of our MPs demand an inquiry into the role of several well known US corporations, and senior US politicians with documented links to them, in the illegal US invasion of Iraq. The ongoing inquiry into the Iraq war could easily be expanded to look at this issue.

  • Comment number 29.

    The one thing. Numero uno. No 1. That you have to realise about this whole affair is THE MID TERM ELECTIONS.

    Nothing else matters..

    BP are being used as -put your off color description here- excuse to kick anyone as long as it increases the Obama stock.

  • Comment number 30.

    I am not sure what weget out of the 'special relationship'. I can think of no recent example when it has been to our advantage to be allied with the Americans.

    They needed us to give us respectibility for the invasion of Iraq, which MI5 thought was not to our advantage. We have been conned into trying to quell a country which has been a thorn in everyone's side for well over a century. We do have a chance to buy a very expensive nuclear weapons system, but that is useless as I cannot see any situation where it would be of any use to us. In every part of the special relationship we are the junior party - it would be special if the Americans adopted a poicy which did not particularly suit them, but really favoured us. But they don't.

    At the first sign of a problem they decide that it is politically brilliant idea that they try to tell us how to run the our companies, our legal system and much more besides. They are perfectly entitled to do that, but we should not give in to them believing that because of the 'special relationship' it is to our advantage.

  • Comment number 31.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 32.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 33.

    BP did what it wanted without giving two hoots about the environment, or employee health and safety (othewise they'd have had the remote control shot-off valve). If anyone thinks they are going to pay, you are kidding yourself on. How long ago was the Valdez mess? Did they pay out or did they drag it out in court? https://www.youtube.com/watch?v=2_qPIgY0-i8


    Why were BP staff asking the locals to sign 'forms' for around 5K? Why are people like Robert Kennedy Junior saying the coast line is like a police state. Why is the lawyer and radio show host Mike Papantonio saying the police state seems to be under control of BP and not the state and calling it a corporate-ocracy? https://www.youtube.com/watch?v=59DdVTxGrWs

    BP did what the officials wanted - drill, baby, drill.

    BP, just like all other oil companies got the tax breaks supposed to be given in order to help out with the costs of innovation.

    So has BP developed wave-power, wind-power, , solar power etc and ready, in position to roll out a new energy supply for the US and for the rest of us? No.

    I doubt they even had the booms they needed where they needed them, should have had at the ready just in case there was a spill.

    Let them fall over.

    Shareholders, you gambled on a duff company. Tough luck. If you don't like it, stay out of the bookmakers.

    We don't need companies or managers who are so bad at their jobs I wouldn't let them sell ice-cream in a van.

  • Comment number 34.

    10. At 12:12pm on 21 Jul 2010, Jacques Cartier

    Do you think the corporate manager-dunce people who make a bucket all went to the same management school and courses?

  • Comment number 35.

    #27, wotw, you are spot on, there is a HUGE Problem there. The banks are even having to take a haircut on German Bunds of 3%, again optimistic, and also quite amusing that the so-called bedrock of stability in Europe is going to inflict losses on the bondholders.

    Basically, the banks will have to be bailed out, or monetary policy will have to be so expansionary to prevent LIBOR etc sky-rocketing, otherwise the crunch is going to be so painful, every westernised economy's public debt will be over 100% if they bail them out again, and if not, well could well have a depression.

    The Americans are ridiculous about BP, watching CNBC everyday also leads me to an amusing conclusion. They can't deal with the rise of China. They have no idea what to do, not a clue. Should they trade with them, ban them, complain about the yuan?! They want to increase manufactured exports 5 fold in 5 years, yet they moan about transferring technology through exports?! America is a strange, strange place... And how can Anadrako, 25% owner of the project refuse to pay its share of the clean up bill? So much for the rule of law in the States...

  • Comment number 36.

    32. At 5:30pm on 21 Jul 2010, writingsonthewall

    It's what happens when a democracy is lead and 'regulated' by business people who think serving their own interests (bank balance) are the same as serving the interests of the people.

    We need a lot more investigative reporters than we've got. Maybe the police officers about to be made redundant would make really good investigative reporters!

  • Comment number 37.

    You're right about the proof of the well integrity: if it holds it wasn't broke. Seepages from other unrelated fissures need to be set aside too.
    That well integrity will be vital in the tiresome Court battles to come over who's to blame and should share the clear-up costs?
    Maybe it's as 'well' that the relief wells are delayed a little longer? For as long as the CAP is clearly holding the pressures (over 6,000 psi & rising) the harder it will be for the contractors to avoid paying for their share of the costs and public approbium.

  • Comment number 38.

    36. At 6:42pm on 21 Jul 2010, copperDolomite wrote:
    32. At 5:30pm on 21 Jul 2010, writingsonthewall

    It's what happens when a democracy is lead and 'regulated' by business people who think serving their own interests (bank balance) are the same as serving the interests of the people.

    We need a lot more investigative reporters than we've got. Maybe the police officers about to be made redundant would make really good investigative reporters!
    ------------------------------------------------------------------------
    Good idea.

    Small worrying point. Budgets for investigative reporting are being cut and media outlets for their material (other than the Internet) are likely to shrink over the years ahead.

  • Comment number 39.

    This sums up the situation quite nicely regarding BP

    https://www.youtube.com/watch?v=Ig-SeZmL3YA

  • Comment number 40.

    31. At 5:21pm on 21 Jul 2010, writingsonthewall wrote:

    'So what do we use as our measure? - well Gold of course, and lets look at the world of currency through the eyes of gold shall we?

    In 1 year the following movements have occured.

    Dollar -25.87%
    Sterling -34.92%
    Yen -17.36%
    Euro -38.24%'


    Why can't people see this? I think it's because there seems to be a lot more 'green shoot' stories. Car plant production orders for coal powered cars, bank profits for JP Morgan and Sucks, to a certain degree, bonuses for rail bosses and civil servants and pay raises in the private sector (BT and offered to BA). I can't remember them off the top of my head. I try to purge them and think of them as media and government propaganda.


    '...I wonder if Robert will return in time from his holidays to break the story of "banking bailout II - the return of the vampire banks" - or whether he booked with goldtrail and is consequently stuck in Turkey!

    The clock is well and truly ticking - if you haven't started making plans already then I suggest you get on with it.'


    It was the Chinese double pipe blast that made my heart sink to the lowest level of fear yet.

    https://www.bbc.co.uk/news/world-asia-pacific-10708375

    (What a horrible way to go).


    I'm off to Turkey next week (not with Goldtrail) which could scupper my contingency plans. My plans are in place for two timescales 1) allowing for a few weeks of disintegration after the cats out of the bag (so blatantly so that even an England centre forward would realise it and be afraid) and for immediate and total upheaval.

    Don't get me wrong, I'm still going to Turkey but I'll take my driving license and credit cards just incase something happens in the next 2 weeks making it difficult to travel. Who knows?

    My fear is increasing and I am a rational man. Buy food, buy water, then think about gold and silver or even packets of cigarettes. Anything you can trade.

    My word I do sound irrational (almost like some kind of 'flee to the mountains' nut). Please prepare yourselves ladies and gentleman. As Chris Martenson says (I paraphrase) If you prepare for the worst and it doesn't happen you may end up feeling a little foolish.

    Consider the alternative. You have been warned.


    Mr Dempster, thank you for you early morning lesson


  • Comment number 41.

    23. At 2:58pm on 21 Jul 2010, Wee-Scamp wrote:

    #2

    You're right. BP certainly needs to invest in new technologies and enter new markets.
    ...................
    Wee-scamp
    Thank you ... yes ... well understood and the missed opportunities by BP ... and I think that the BP business model needs urgent strategic re-planning and an Option 'B' re: USA

  • Comment number 42.

    38. At 7:08pm on 21 Jul 2010, Up2snuff

    Their setting up in the US. Not sure how they are getting their funding, but all those US redundant, hacked off journalists in the States are setting up on their own groups. I've mentioned Palast a few times over the last few posts - he's doing alright.... So it is possible. Democracy Now is another. (see https://www.democracynow.org/1997/11/18/fear_and_favor_in_the_newsroom and https://www.democracynow.org/2000/3/24/cnn_and_the_military ) They've tons of stuff on media failure (like the US media refusing to take seriously the BBC Newsnight reports on election fixing by Palast)

    Oliver Stone's new movie should be worth watching.

    And this lot are the bunch our elected leaders are grovelling around like puppy dogs! I wouldn't have the American 'establishment' in my house for a cup of tea, I'm far too fussy about what kind of people I hang out with!

    I used to live in the US and thought their media was shockingly poor. Just didn't realise about all those little, growing media groups at the time. The most pathetic thing is we apparently 'love their TV'.

    To all BBC reporters please do decent investigative reporting, learn even basic statistics, ignore the world of celebrity and new electronic products or websites (to not advertise) and stop worrying about 24 hour coverage full of non-news. Start with breakfast news, dump Click etc, and do it properly and keep the media mogul(s) out.

  • Comment number 43.

    Thanks for the real, non tinted glasses, update WOTW. The averagejoe household has picked up some gold sovereigns just in case the worst happens. I note the price has dropped recently, I'm tempted to buy a little more. The BP story is simply a distraction from the real problems that are to unfold. Watch foe the mainstream media "surprise" when the proverbial hits the fan. Keep the updates coming, much appreciated.

  • Comment number 44.

    Just read that telgraph story. The banks have to find £390B next year, twice the amount they achieved in the credit boom!!!!!!!!!!! Its simply never going to happen. THey will try to roll over some of the debt and the government will try to issue fresh gilts, in a panicky market. Its not looking good. Those Mayan's may be proved right afterall.

  • Comment number 45.

    #2,41 nautonier

    I am all for new technologies. But they do actually have to work.

    Hydrogen in particular is not a good technology. In use it has to compete price wise with what it is made from. Energy wise it is bad too since so much energy is lost when it is either made or used.

    Vegetable oils are another one to watch out for. Do we really want to burn foodstuffs?
    Or plant poor yield crops on land that would better be producing food?

    Face it. We live in the oil age.

    Perhaps when oil runs out we should have solar collectors. But not PV.
    Meanwhile BP looks like it should retract back to petroleum.

  • Comment number 46.

    43. At 8:45pm on 21 Jul 2010, Averagejoe
    The BP story is simply a distraction from the real problems that are to unfold.


    I disagree. It is all the same story. It is all about a type of human behaviour, the types of people running the show have no comprehension of what they are really doing, and if it all goes wrong, well, so what, it won't matter when you have a wallet stuffed with so much you'll never be able to spend it all.

    Who regulates the finances, sits on the committees? Bankers.
    Who populates environmental regulators?
    Who pays for lobbyists to have governments 'loosen' regulations that get in the way of profit?

    The only difference is the industry.

    It is all about corporate failure, lack of knowledge and responsibility, firing the risk managers, the people with real knowledge, know-how the ability to think as a means of reducing costs (enhancing profits and bonuses), from creating thousands of laws for us plebs and cutting the laws regulating corporate and work-place activity, industry executives moving into government, from committees to dinners, to holidays and conferences.

    Was it Davos they were all hanging out together? Didn't see any of them up the hills and in the local pub drying off from a night in their tents, or sharing a hob in the Youth Hostel, did you?

  • Comment number 47.

    38. At 7:08pm on 21 Jul 2010, Up2snuff wrote:
    36. At 6:42pm on 21 Jul 2010, copperDolomite wrote:
    32. At 5:30pm on 21 Jul 2010, writingsonthewall

    > We need a lot more investigative reporters than we've got.
    > Maybe the police officers about to be made redundant would
    > make really good investigative reporters!

    No. Police are notoriously risk averse. The best
    investigative reporters are whistle-blowers. We need
    strong laws to protect whistle-blowers from revenge.

    > Budgets for investigative reporting are being cut

    Yes. But Julian Assange's wikileaks allows us all to post stuff up.
    The more, the merrier. Wikipedia is a good spot as well, as
    Trafigura have found out to thier great cost.

  • Comment number 48.

    47. At 10:25pm on 21 Jul 2010, Jacques Cartier

    Most of them are risk averse that is true; from what I know they are no different from the rest of us - there are those that tell the boss he is off his rocker and those that salut! I was thinking about the odd few who are quite comfortable telling the boss they are off their rocker - It's a requirment for my job and I'm sure you do too - without using the word rocker, obviously.

    I hadn't thought about the 'yes-sirs, no sirs, three-bags full sir' but I suppose they aren't likely to be first in line for redundancy, are they....


    I'd be careful about wiki. There isn't anything to stop someone re-writing the facts as they see it. So some pages are constantly 'altered'.

  • Comment number 49.

    Obama is going to have to 'kick his own ass' come the mid term elections as the US and now the world have seen through him.

    The democrats will take a kicking, Obama becomes a lame duck president and is booted out after 1 term - that's the writing on the wall and no amount of Brit bashing from his administration will save them.

    BP to sell off some assets, cover the costs, remain solvent and start paying dividends next year and the US will continue its decline regardless.

  • Comment number 50.

    @49: ninetofivegrind:

    'Obama is going to have to 'kick his own ass' come the mid term elections as the US and now the world have seen through him.'

    Well-stated. The US Federal Government has, once again, proved to be incompetent, and venal. Obama let weeks go by before mustering anything approximating a response, not even bothering to place a phone call.

    He decided the best courses of action were:

    1. Extort a $20 billion promise from BP in a Chicago-style extortion meeting--'dis a nice liddle oil company you got here! Shame if we were to have to BURN IT DOWN!'

    2. Shut the entire Gulf Coast economy down, from Texas through Key West, by banning drilling and all fishing/shrimping/oystering indefinitely.

    3. Make it as difficult as possible for the Gulf Coast states and localities to defend their shores from the oil.

    4. Refuse to allocate resources on hand to clean up the spill, and hijack resources acquired by the individual states.

    In the meantime, BP capped the well, is closing in on sealing the well, installed Americans to run the clean-up, publicly and quickly sold assets to raise cash to pay for the mess created. They ran simple ads, in American english, in American accents, accepting full responsibility and pledging to clean every bit of it up, no matter how long it took.

    BP is beginning to make the US government look like the Keystone Kops. The anger on the Gulf Coast is increasingly directed at Obama and company. The rig that blew up was an accident. Obama's behaviour is deliberate.

  • Comment number 51.

    34. At 6:05pm on 21 Jul 2010, copperDolomite wrote:
    10. At 12:12pm on 21 Jul 2010, Jacques Cartier

    Do you think the corporate manager-dunce people who make a bucket all went to the same management school and courses?
    ---------------------------------------------------------------------
    Did I hear that the bods who came up with the idea for CDOs were Statistics or Mathematics Masters from Oxbridge? Can anyone confirm?

  • Comment number 52.

    I see WOTW comments have disappeared and referred to the moderators. Why? There was nothing in them that did anything but present truth and facts. Why must the truth be covered up. Its shameful, the truth will always out.

  • Comment number 53.

    40. At 8:20pm on 21 Jul 2010, Remantled wrote:
    31. At 5:21pm on 21 Jul 2010, writingsonthewall wrote:

    'So what do we use as our measure? - well Gold of course, and lets look at the world of currency through the eyes of gold shall we?

    In 1 year the following movements have occured.

    Dollar -25.87%
    Sterling -34.92%
    Yen -17.36%
    Euro -38.24%'


    ... Car plant production orders for coal powered cars, ....
    -----------------------------------------------------------------------
    While I'm in engineering mode ...

    Coal powered cars - steam - interesting. Maximum torque at zero revs, potential for massive acceleration and high top speeds. Nah, the regulators won't wear that. And coal isn't very convenient as a fuel ...

    And while I'm in financial/economics engineering mode, what would returning to the Gold standard involve? PM, CoE & BoE Chief, all standing with their hands on the Bible and promising to obey, then going out and announcing a massive devaluation of the pound?

    What if we were the only ones to go back to the Gold standard? How much would we have to devalue? What if we are the only ones who do it? What would the effects be on macro, micro, sub-micro and sub-sub-micro levels?

    Half-a-side of A4 anyone? But hey! Let's be careful out there, today.

  • Comment number 54.

    @ 51. At 08:38am on 22 Jul 2010, Up2snuff wrote:

    > Did I hear that the bods who came up with the idea for CDOs
    > were Statistics or Mathematics Masters from Oxbridge? Can
    > anyone confirm?

    There seems to be two strands to this - the mad scientists who cooked up the idiotic schemes, and the gormless bankers who hired them. It's hard to say who is more stupid, eh?

  • Comment number 55.

    48. At 11:15pm on 21 Jul 2010, copperDolomite wrote:

    > I'd be careful about wiki. There isn't anything to stop someone
    > re-writing the facts as they see it. So some pages are constantly 'altered'.

    Look out for the Ian Tomlinson article today - they'll be a lot of edits in that.


  • Comment number 56.

    15. At 1:16pm on 21 Jul 2010, Basil wrote:

    "BP's PR and advertising seems now to be on the ball. They have americans talking to americans using the form of words that creates the message that they want to hear."

    So does that mean a good bit of PR and the problem is solved? - I thought there was an oil leak!

  • Comment number 57.

    What I find odd about the safety record of BP is that all the problems seem to have been in the US. Can anyone name a refinery problem anywhere else in the world except the US? Likewise I can't recall an oil well problem in the North Sea or anywhere else.

    Could it be that the facilities BP bought in the US which of course were all American run were in a shocking state (and had American safety standards);BP is now carrying the can for these? But it would not be politic to explain this to Congress.

    I will be interested to see, once the law suits start, how many people are US citizens (one has already refused to testify (on health grounds), another has "taken the Fifth"). Possibly once the awful truth dawns that this is a problem caused by US citizens and companies the tune will change and the focus switch from US to British issues to suit the American politicians who need issues for their re-election campaigns.

  • Comment number 58.


    "Dear Mr Obama

    In view of the oil spil in your neck of the woods, as an initial gesture we are willing match the compensation paid by Union Carbide in respect to the Bhopal disaster where 15,000 people lost their lives. This will be index linked to reflect inflation. If Union Carbide increase their compensation paid then we will match that increase.

    Hope this clarifies matters"

  • Comment number 59.

    Has anyone else seen today on CNBC that the Ohio attorney general is trying to sue BP on behalf of the pension funds who lost money?

    How ridiculous is that, sueing a company because you lost money on the stockmarket! You can't do that....

 

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