BP Poised for Comeback After Settlement on Oil Spill Claims
As mentioned in The Roundup, BP settled with 120,000 victims of the oil disaster in the Gulf coast for a sum of $7.8 billion, all of which will come from the already allocated $20 billion oil spill fund. This result works well for BP, which can now get back to the business of exploiting world resources for profit.
Shares in BP rose over 2 percent on Monday after the oil giant reached a settlement with businesses and individuals impacted by the Gulf of Mexico oil spill worth an estimated $7.8 billion.
Some analysts said the expected payout was less than they had forecast, reduced legal uncertainty and suggested the final settlement with BP’s biggest opponent – the U.S. government – would be much lower than the worst case scenario.
The government still plans to sue BP over the spill, but they maximize their claim if they can prove “gross negligence” on BP’s part. In that case, the fines could reach as high as $20 billion. But analysts believe that the settlement has weakened the argument for gross negligence, and strengthened the probability of a settlement with the feds.
And even if the government can wriggle a princely sum out of BP for their role in the disaster, BP can still earn it back through a resurgence in offshore drilling, just two years after the blowout on the Deepwater Horizon rig.
Nearly two years after an explosion on an oil platform killed 11 workers and sent millions of gallons of oil gushing into the Gulf of Mexico, deepwater drilling has regained momentum in the gulf and is spreading around the world […]
After a yearlong drilling moratorium, BP and other oil companies are intensifying their exploration and production in the gulf, which will soon surpass the levels attained before the accident. Drilling in the area is about to be expanded in Mexican and Cuban waters, beyond most American controls, even though any accident would almost inevitably affect the United States shoreline. Oil companies are also moving into new areas off the coast of East Africa and the eastern Mediterranean.
The reason for the resumption of such drilling, analysts say, is continuing high demand for energy worldwide.
“We need the oil,” said Amy Myers Jaffe, associate director of the Rice University energy program. “The industry will have to improve and regulators will have to adjust, but the public will have to deal with the risk of drilling in deep waters or get out of their cars.”
Definitely the public’s fault, right?
As noted here, this is a global problem, with offshore drilling expanding around the world. Even if the US continued its moratorium we would be seeing drilling expand. And the risks in countries with little or no oversight of industry expand along with the drilling.
Good thing we’ve all learned the lessons of the Deepwater Horizon disaster.