As we near the end of BP’s AGM, one thing we can report is that Bob Dudley is still standing. Which is more than can be said of several protestors against the development of Canadian oil sands who were carted out, in some cases lifted off their feet, after shouting across Mr Dudley as he tried to defend such developments. Read more
BP will not pay bonuses for last year to any of the executive directors involved in the disastrous Gulf of Mexico spill, but the UK oil group has awarded partial pay-outs to two directors for meeting specific divisional targets. Read more
When Hercules Offshore agreed to buy Seahawk Drilling’s 20 jackup rigs, the obvious question was whether it planned to use them in the Gulf of Mexico. After all, Seahawk is only focused on the Gulf, and it is pricey to move rigs. Read more
The civil suit against BP brought by the US government on Wednesday had been inevitable since we first found out that thousands of barrels of oil were spilling into the Gulf of Mexico. The timing of Wednesday’s announcement, mandated by the judge at the New Orleans court where the trial will be held, was the only surprise. It perhaps did not send the best message about the business-friendly nature of the administration, on a day when President Obama was courting many of America’s top CEOs.
The share price reaction was modest, reflecting the fact that while the headlines are terrible for sentiment, investors always knew this day would come. The news looks bad for BP, but shareholders can still hope for better, as the Lex column points out.
Nevertheless, the Department of Justice’s action is a salutary reminder that, eight months after the fatal accident on the Deepwater Horizon, and three months after the ill-fated Macondo well was sealed for good, BP is still not even close to finding out exactly how much the disaster will cost. Read more
The Obama administration has decide 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. Read more
Royal Dutch Shell’s announcement this morning that it is selling its holding in six oil and gas fields in the Gulf of Mexico is by no means a signal that the Anglo-Dutch major is about to reduce its presence in the area. The company is doing what most of its peers have been doing - selling non-core assets and focusing on higher-quality ones.
At the same time, most of the supermajors are also increasing their capital expenditure budgets in an attempt to increase production growth – one of the themes to come out of the third quarter reporting season that just ended which saw Exxon and Shell report sharply higher profits, fuelled by strong crude prices and better refining margins.
Chevron’s announcement that it will lead a $7.5bn investment in the deepwater Gulf of Mexico underlines how eager the industry is to get back out there despite BP’s accident. Read more