This may be merely coincidence, but it seems unlikely.
The best performing sector on the benchmark US share index, the S&P 500, is currently energy. Of that sector, it is the oil services companies that are doing best – the ones who might have been hit heaviest had stringent new regulations hampered the way they were able to run rigs.
As I write, the sector as a whole is up 1.5 per cent, with services companies rallying 2.6 per cent. Halliburton is up 3 per cent, while rivals Cameron International and Baker Hughes have risen 4.5 per cent and 3.3 per cent respectively.
The US oil and gas industry feels slighted by the fact that the presidential oil commission’s report raises questions about the safety of deepwater drilling generally. Speaking for the industry is the American Petroleum Institute, which represents more than 400 oil and gas companies:
The industry has already taken significant action to futher improve safety in offshore operations, consistent with the recommendations of the presidential commission on last summer’s oil spill.
As we saw from Ed’s list of the main recommendations from the National Commission into the BP oil spill, they were pretty much what we were expecting from the overnight reports. But a few interesting pieces of information arose from the press conference.
Here, in no particular order, is what we learned:
Here is the list of the National Commission’s main recommendations following the BP oil spill.
- Offshore drilling can be done safely, and US oil reserves in deep water and the Arctic are vital resources that the country will need
- A government safety agency should be set up to oversee offshore drilling
- Offshore regulators including the Interior department and the coast guard should be given significantly increased funding
- The oil industry should create a “self-policing entity” to establish and enforce safety standards
- Companies should have to show they have the technology to control an underwater blow-out before they are given permission to drill
- The government should develop the expertise needed to assess and supervise the control of blow-outs
- The $75m cap on the liability faced by companies in the event of a spill (which has been voluntarily waived by BP) should be substantially increased.
- 80 per cent of the penalties for the spill imposed under the Clean Water Act should go for long-term restoration of the Gulf of Mexico
- The US should launch an immediate research program into the issues raised by possible drilling in the Arctic, and begin talks with other countries such as Russia and Greenland that plan to develop Arctic reserves
Much of this was leaked this morning.
The final report has been published, and you can find it here. You can also watch the press conference live here.
Our latest analysis can be found here. And we will be bringing you regular updates as this story unfolds.
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.
The report into the Gulf oil spill, a chapter of which was released last night, made for pretty grim reading for BP and the other companies involved.
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”.
The Times is currently publishing extracts from Loren Steffy’s new book Drowning in Oil, about the BP oil spill, in addition to the extracts on Fuel Fix published earlier this month.
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.”