BP Plc’s costs for the worst spill in US history appeared set to rise as a partner in the out-of-control well blamed BP, while the new federal czar overseeing damage claims said BP would pay more if US$20 billion was not enough.
The British oil company said it would not be distracted by a dispute with Anadarko Petroleum Corp. The owner of a quarter of the well gushing into the Gulf broke its near-silence on the spill to squarely pin the blame — and financial responsibility — on BP.
”There appears to be gross negligence or willful misconduct,” Houston-based Anadarko chairman and CEO Jim Hackett said in an interview that helped to drive his company’s shares up 2.2 percent in after-hours trading on the hopes it might avoid multibillion-dollar liabilities.
BP said it “strongly disagrees” with the assessment of gross negligence, but would keep its focus squarely on the Gulf, cleaning up the spill and plugging the well.
The new federal administrator of a fund to pay for damages told CBS News it would be a “horror” if BP went bankrupt, but said the US$20 billion fund agreed upon by BP and the White House could rise if it proved insufficient.
US President Barack Obama has seen his popularity slip over his handling of the spill and lawmakers in both major parties used hearings with BP and other oil industry officials this week to gather ammunition ahead of November elections.
Gulf residents, from state officials to citizens on the blighted beaches, see costs skyrocketing with the collapse of the fishing industry, a deep water oil drilling moratorium and growing environmental destruction along the coast.
“I think it’s going to go over US$100 billion,” said Brian Miguez, a food service salesman from New Orleans, at his vacation property in Grand Isle, Louisiana, where the spill has forced the closure and cleanup of 10km of sandy beach.
“They haven’t even felt the wrath of the lawsuits that are going to come in,” he said.
The Center for Biological Diversity on Friday filed what it said was the largest citizen enforcement act ever under the Clean Water Act, suing BP and rig operator Transocean Ltd for up to US$19 billion, if the spill flows until August.
As the crisis entered its 61st day, BP is capturing record amounts of crude — with 25,000 barrels (3.97 million liters) siphoned off on Thursday, the US Coast Guard admiral leading the relief effort said.
However, Admiral Thad Allen also said that a minimum 35,000 barrels a day, and possibly as many as 60,000 barrels continue to pour from the well, which ruptured after an April 20 explosion on an offshore oil rig that killed 11 workers.
Kenneth Feinberg, the man picked by Obama to oversee the US$20 billion compensation fund, pledged during a visit to the Gulf Coast state of Mississippi on Friday to pay legitimate claims quickly. BP and Obama have agreed that if necessary BP would pay more, he said.
BP is seeking up to US$7 billion in loans from seven banks and may offer up to US$10 billion in debt as early as next week.
The company’s debt is currently trading at junk levels, and Moody’s on Friday cut its rating three notches on concerns about spill liabilities. Moments after Anadarko said BP would have to pay all claims, Moody’s cut Anadarko debt to junk on similar concerns it might not avoid contributing to damage claims.
After falling 6.8 percent in a week of volatility driven by politics in Washington, BP’s US-listed shares remained nearly unchanged on Friday. The shares are down 26 percent so far this month, their worst month since the October 1987 market crash.
The Wall Street Journal reported late on Friday that BP’s well used a cheaper technology than the industry standard and was less secure against natural gas blowouts of the type that destroyed it.
The newspaper’s research found that BP used the cheaper technology much more frequently than rivals.
CONFRONTATION: The water cannon attack was the second this month on the Philippine supply boat ‘Unaizah May 4,’ after an incident on March 5 The China Coast Guard yesterday morning blocked a Philippine supply vessel and damaged it with water cannons near a reef off the Southeast Asian country, the Philippines said. The Philippine military released video of what it said was a nearly hour-long attack off the Second Thomas Shoal (Renai Shoal, 仁愛暗沙) in the contested South China Sea, where Chinese ships have unleashed water cannons and collided with Philippine vessels in similar standoffs in the past few months. The China Coast Guard and other vessels “once again harassed, blocked, deployed water cannons, and executed dangerous maneuvers” against a routine rotation and resupply mission to
GLOBAL COMBAT AIR PROGRAM: The potential purchasers would be limited to the 15 nations with which Tokyo has signed defense partnership and equipment transfer deals Japan’s Cabinet yesterday approved a plan to sell future next-generation fighter jets that it is developing with the UK and Italy to other nations, in the latest move away from the country’s post-World War II pacifist principles. The contentious decision to allow international arms sales is expected to help secure Japan’s role in the joint fighter jet project, and is part of a move to build up the Japanese arms industry and bolster its role in global security. The Cabinet also endorsed a revision to Japan’s arms equipment and technology transfer guidelines to allow coproduced lethal weapons to be sold to nations
Thousands of devotees, some in a state of trance, gathered at a Buddhist temple on the outskirts of Bangkok renowned for sacred tattoos known as Sak Yant, paying their respects to a revered monk who mastered the practice and seeking purification. The gathering at Wat Bang Phra Buddhist temple is part of a Thai Wai Khru ritual in which devotees pay homage to Luang Phor Pern, the temple’s formal abbot, who died in 2002. He had a reputation for refining and popularizing the temple’s Sak Yant tattoo style. The idea that tattoos confer magical powers has existed in many parts of Asia
ON ALERT: A Russian cruise missile crossed into Polish airspace for about 40 seconds, the Polish military said, adding that it is constantly monitoring the war to protect its airspace Ukraine’s capital, Kyiv, and the western region of Lviv early yesterday came under a “massive” Russian air attack, officials said, while a Russian cruise missile breached Polish airspace, the Polish military said. Russia and Ukraine have been engaged in a series of deadly aerial attacks, with yesterday’s strikes coming a day after the Russian military said it had seized the Ukrainian village of Ivanivske, west of Bakhmut. A militant attack on a Moscow concert hall on Friday that killed at least 133 people also became a new flash point between the two archrivals. “Explosions in the capital. Air defense is working. Do not