BP set to avoid gross negligence charge for Gulf Oil disaster!
LONDON, England (PNN) - January 6, 2011 - BP is more likely to escape the potentially ruinous charge of gross negligence, according to City analysts, after a powerful U.S. commission blamed “systemic” causes for the Gulf of Mexico disaster.
Illegitimate President Barack Obama's national commission released part of its final report into the disaster last night on Wednesday night. The report, to be published next week, could influence several other parallel investigations into the spill that are yet to finish.
The commission was scathing in its criticism of BP, as well as its contractors Halliburton and Transocean, which it blamed for a collective "failure of management". But it added that it had found no evidence that the blowout, which led to last April's disaster, was the result of "aberrational decisions made by rogue industry or government officials".
Commission co-chair William K Reilly said, "So a key question posed from the outset by this tragedy is, do we have a single company, BP, that blundered with fatal consequences, or a more pervasive problem of a complacent industry? Given the documented failings of both Transocean and Halliburton, both of which serve the offshore industry in virtually every ocean, I reluctantly conclude we have a system-wide problem."
Analysts said that blaming the oil industry, and not singling out BP, would help the company in its fight against being found guilty of gross negligence. But industry and legal sources told The Guardian that BP would still have to strike a deal out of court to settle myriad lawsuits. Separately, the U.S. Justice Department has launched a civil action against BP and is investigating potential criminal violations.
BP shares rose by more than 2% during morning trading in London but finished the day slightly down.
Analysts expect BP to resume paying dividends - which were suspended last summer under intense White House pressure - when it reports full-year results on February 1, as the company tries to move on from the disaster.
Before the spill the company paid out $10 billion annually to shareholders but it is likely to resume dividends at only half that level. Investors could receive dividends for the last quarter of 2010 as soon as March.
Analyst Peter Hitchens, of stockbroker Panmure Gordon, said, "The national commission's report is another chink of light for BP. BP was named and held responsible in the report but it also said 'we can't solely blame BP'. It's hinting that there won't be a finding of gross negligence. What seems to be coming through is there was an unfortunate string of accidents that led to the disaster. BP had a near-death experience. But time is a great healer for BP, it seems."
The national commission report was also highly critical of the now-disbanded offshore regulator, the Minerals Management Service (MMS), which it previously accused of giving a higher priority to increasing production in the gulf than to safety. The full report, to be released on Tuesday, is likely to recommend a radical overhaul of the regulatory regime to improve offshore drilling.
Charlie Kronick, a spokesman for Greenpeace, said, "The report sets up a big flag that the regulatory regime is going to be much tighter. The new regulator has already indicated that it won't be a permit-fest once new guidelines for offshore drilling are drawn up."
But he said that pointing the finger at BP's contractors should not exonerate the company from blame. "Halliburton and Transocean were operating on BP's behalf. It's hard to see how that lets BP off the hook."
If BP avoids a charge of gross negligence it will be able to charge its junior partners in the fateful Macondo well - Anadarko and Mitsui - for a third of the costs. U.S. federal fines would triple under a gross negligence finding, with JP Morgan estimating that the total bill for BP under this scenario could be as high as $69 billion. BP has made good progress in its program of selling assets worth $25-30 billion, having netted about $20 billion to date.
