Our latest analysis can be found here. And we will be bringing you regular updates as this story unfolds.
© The Financial Times Ltd 2014 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
The National Commission looking into the BP oil spill will present its final report on Tuesday at 3pm GMT (you can watch it live here). So what can we expect it to find?
As far as blame goes, we know most of that thanks to the release of one of the chapters last week. The commission will spread the blame among BP, Transocean, Halliburton, and to an extent, regulators. The news came as a relief to BP investors, who have sent the stock over six per cent higher since the news broke.
So what we will hear today is some indication of the longer-term effect of the spill on policy and regulations.
BP just can’t keep out of the news these days.
After hitting the Gulf coast with its Macondo well oil spill last year, the oil major as of Saturday was seemingly involved in another major oil-infrastructure fail — the shutdown of its Trans-Alaska pipeline system due to a leak.
While the environmental implications aren’t likely to be as severe, the impact on US crude prices could be well felt if the shutdown remains prolonged.
Most of the mistakes and oversights at Macondo can be traced back to a single overarching failure – a failure of management. Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blow-out.
Shares in BP hit a 6-month high this morning after a report that rival Royal Dutch Shell considered an opportunistic takeover bid for the UK oil group in the summer during the Gulf of Mexico oil spill.
BP’s shares were up 5 per cent to 488.85p at 10am this morning in London trading.
According to the report in the Daily Mail Shell weighed a bid while oil was still flowing into the waters of the gulf but decided against it because of the potentially uncapped legal liabilities facing BP. The paper says Shell might still bid for BP if another suitor emerges over the coming months but is unlikely to be the “first mover”.
As Ed Crooks said in his review of the book, it is good on drama and detail but less so on telling us anything particularly new about the spill or the company.
The Times extracts are readable and interesting, however. In the first (£), he tells the story of the night of the explosion via two of the crew on board, Stephen Stone and Mike Williams. This is the from williams’ story:
Back in the electronics shop, the first explosion blew the three inch-thick steel door off its six hinges, knocked Mike Williams across the room, and slammed him into the far wall. The door followed and struck him in the head. A line containing carbon dioxide ruptured and began spewing gas into the room, clouding his vision. He couldn’t see. He couldn’t breathe. He crawled along the floor, knowing that oxygen would be more prevalent there, and made it back to the opening where the door had been.
The second is a similarly entertaining read, memorable for one quote in particular, from a “retired oil company executive”: “Tony’s a good guy, bright guy, but he can’t keep his mouth shut sometimes.”
Answering Energy Source readers’ questions, Peter Voser said:
Undeniably, the Macondo incident has greatly harmed the oil industry’s reputation. Our ablity to drill in deep water has been questioned, and that’s a serious matter.
There have been a string of leaks from natural gas pipelines in recent months in the US. Chevron had two leaks on the same line in Utah this past summer. PG&E suffered a natural gas transmission line explosion in September in California that killed eight people and destroyed dozens of homes. El Paso just suffered a leak outside of Houston. And there have been others.
Ray LaHood, US Transportation Secretary, has sent to Congress proposed legislation to provide stronger oversight of the nation’s pipelines and increase the penalties for violations of pipeline safety rules.
The Obama administration has decided not to grant any new leases in the eastern Gulf of Mexico, off the coast of Florida, for the foreseeable future, as a result of the BP spill.
AP broke the story, reporting that the ban would last seven years:
A senior administration official told The Associated Press on Wednesday that drilling leases won’t be considered in the waters off Florida as part of the change. He spoke on condition of anonymity because the decision hadn’t been announced yet.
He said that because of the BP spill, the administration now understands the need to elevate safety and environmental standards. Before the spill, the administration had considered a plan to allow drilling in the eastern Gulf.
One note of caution: the NY Times has the same story, but is reporting that the ban would last “at least for the next five years”. Presumably the picture will become clearer when Ken Salazar has made the formal announcement this afternoon.
Our US energy editor Ed Crooks last night won the UK Foreign Press Association’s print and web news story of the year for his inside story on BP’s response to the Gulf spill.
You can read the story, which judges called a “rigorous and balanced” piece on “one of the biggest stories of the year”, here.