The big question for months has been what would happen if there was a significant spill in the deepwater outside the Gulf of Mexico. Following BP’s Macondo disaster, the industry worked together to build two spill response systems for this area. But nobody said what would happen if a deepwater disaster unfolded in the waters offshore Ghana or Brazil.
Now the industry has gathered together to address that question. Nine of the world’s biggest oil and gas companies – BG Group, BP, Chevron, ConocoPhillips, ExxonMobil, Petrobras, Shell, Statoil and Total have launched the Subsea Well Response Project (SWRP), an initiative designed to enhance the industry’s capability to respond to subsea well control incidents.
ConocoPhillips’ shrink-to-grow strategy is doing more than benefitting the company and its shareholders. It turns out the architect of the programme, Jim Mulva, Conoco’s chief executive (pictured), got a 25 per cent increase in total compensation to $17.9m in 2010.
While it is difficult for an outsider to put a dollar amount on Mr Mulva’s value, the turnround he has staged since the economic downturn exposed weaknesses in his acquisition spree is worth noting.
In early 2009, the US’ third biggest oil and gas company by production and market capitalisation, disclosed a 2008 fourth-quarter net loss of $31.8bn; a $34bn writedown; 1,300 in job losses; and a $2.8bn cut in capital spending.
Tudor, Pickering, Holt & Co Securities puts out a chatty research report every day, and it is worth reading. Case in point came yesterday when I came down to the header Industry response to Macondo.
It referred to a full-page advertisement in the Houston Chronicle from BP’s peers – ExxonMobil, Chevron, Royal Dutch Shell and ConocoPhillips. The ad was for the new oil containment system this group of four have agreed to spend $1bn building to ensure there is never again such a disastrous oil spill in the Gulf of Mexico. From the ad:
Engineer it. Build it. And make sure it is never needed.
But read on….