Tue, Jun 22, 2010 page7

• BP’s estimates show spill may be far, far worse

  SAVING ITSELF? The oil giant reportedly plans to raise US$50 billion to cover spill costs, while its chief executive heads to Russia to reassure Kremlin leaders

  • REUTERS AND THE GUARDIAN
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  An internal BP document released by a US lawmaker estimated that a worst-case scenario rate for the Gulf of Mexico oil spill could be about 100,000 barrels per day, far higher than the current US figure.

  The oil giant said the cost of its response to the spill had hit US$2 billion and it had paid out US$105 million in damages to those affected by the disaster.

  It also rejected claims by its partner in the oil well, Anadarko Petroleum, that it had been negligent in the way it operated the installation.

  

  The Q4000, a vessel leased by BP, left, burns off oil and gas it collected at the site of the BP Deepwater Horizon oil spill in the Gulf of Mexico off the coast of Louisiana, on Saturday.

  PHOTO: BLOOMBERG

  The estimate in the undated BP document released by US Representative Ed Markey, chairman of the energy and environment subcommittee of the House of Representatives Energy and Commerce Committee, compares with the current US government estimate of up to 60,000 barrels gushing daily from the ruptured well.

  “This document raises very troubling questions about what BP knew and when they knew it. It is clear that, from the beginning, BP has not been straightforward with the government or the American people about the true size of this spill,” Markey said.

  “Right from the beginning, BP was either lying or grossly incompetent,” Markey told NBC’s Meet the Press on Sunday, the 62nd day of the spill. “First they said it was only 1,000 barrels, then they said it was 5,000 barrels.”

  BP spokesman Toby Odone said the document appeared to be genuine but the estimate applied only to a situation in which a key piece of equipment called a blowout preventer is removed.

  “Since there are no plans to remove the blowout preventer, the number is irrelevant,” Odone said.

  Meanwhile, the British energy giant is planning to raise US$50 billion to cover the cost of the largest oil spill in US history, London’s Sunday Times reported.

  The paper, without citing sources, said BP planned to raise US$10 billion from a bond sale, US$20 billion from banks and US$20 billion from asset sales over the next two years to cover the cost of the spill.

  The Financial Times said that BP chief executive Tony Hayward was planning to travel to Russia to reassure Russian President Dmitry Medvedev that the oil group is not on the brink of collapse. A BP spokeswoman said she had no knowledge of any trip.

  BP said last week it would suspend dividend payments to its shareholders and increase the pace of asset sales to US$10 billion this year to offset liabilities from the spill.

  BP said on Sunday that 21,040 barrels of oil leaking from the well was collected by its siphoning systems on Saturday. One of the two systems was restarted on Saturday after a 10-hour shutdown to fix a problem with fire-prevention equipment, BP said.

  Kenneth Feinberg, the independent administrator runing the US$20 billion fund set up by BP to compensate victims, said on Sunday he would make sure that “every eligible, legitimate claim is paid and paid quickly.”

  Appearing on Meet the Press, Feinberg also rejected the complaint of Republican Reprentative Joe Barton, who last week likened the fund, set up under pressure from US President Barack Obama, to a government “shakedown” of the company.

  “I don’t think it helps to politicize this program,” he said.
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