BP - off the hook ? ...and a BUY ?

TRUSt_NO_1_2

Looks like I could be wrong and BP could be a buy !

The NFPC is a fund set up to make funds immediately available for oil spills.It is then claimed back from the RP (Responsible Party)

However,somewhere in the small print of the NFPC fund for oil spills law is a clause on limited liability that means BP can claim back costs incurred.I cannot find the actual text in the bill of what the limit on damages liability is,but it is being reported at $75 million.

The NFPC fund will pay for cleaning up and claim off BP.
But the NFPC quotes below indicate that by being as helpful as possible...and providing they were not grossly negligent....

　The RP (responsible party =BP)
　

If the RP pays or incurs removal costs and damages greater than its applicable limit of liability, it may submit a claim to the NPFC for excess removal costs and damages. Likewise, if the RP has a defense under OPA, the RP may submit a claim to the NPFC for all of its removal costs and damages. NPFC adjudicates these claims according to the claims provisions in OPA and the claims regulations (at 33 C.F.R. § 136). The RP has the burden to establish entitlement to the OPA liability limit or defense that is a basis for its claim. With respect to claimed removal costs, FOSCs must certify that all actions of the RP were necessary for the response and consistent with the National Contingency Plan.

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�� [/FONT][/FONT]The RP is not entitled to the limit of liability if the incident is found to have been caused by gross negligence; willful misconduct; or a violation of Federal operating, construction, or safety regulations. Furthermore, entitlement to the limit of liability or an OPA defense is not established if the RP failed or refused:

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�� [/FONT][/FONT]to report the incident as required by law,

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�� [/FONT][/FONT]to provide all reasonable cooperation and assistance requested by the FOSC in connection with removal activities, or

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�� [/FONT][/FONT]to comply with an order issued by the FOSC without sufficient cause.

Some American Senators are trying to rush legislation through to increase this limit of liability to $10billion, but I'm sure BP would fight in court any 'after the event' legislation.Looks like USA could be left with oil on it's beaches and egg on it's face.

1echidna

CHECK ONE: HOW DO OIL COMPANIES USUALLY DEAL WITH OIL SPILLS?

Containment
booms and
filtration pumps Slick lawyers

Reaper

The cost of the clean up is not the main issue affecting its share price. BP made over $40 billion in profits last year.

The issue is more what effect it will have on its reputation and therefore its business in the USA.

StevieJ

Didn't James suggest the fund has a cap at one billion?

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

1echidna

Executives from BP and Transocean Ltd., looked "like deer in the headlights" when they briefed members of the House Energy and Environment committee about the accident and response on Tuesday, said Rep. Joe Barton, R-Texas.
KATC: Gulf shrimp season to temporarily close
Barton is a strong supporter of offshore drilling, and told reporters he didn't want the accident to reverse support for more exploration off the U.S. coasts. But he said he had hoped for "more concrete" answers from the oilmen.
"I have concerns in this particular case about the attention to safety, the attention to maintenance, the attention to using best available control technology and best monitoring practices," Barton said.

http://www.cnn.com/2010/US/05/04/us.gulf.oil.spill.main/?hpt=T2

Expect more of this kind of thing as the affair is examined in more detail. Personally my feeling is that BP will be made to pay both financially and in terms of reputation but we shall see.

amcluesent

>BP will be made to pay<

Certainly the US press/TV is being 'encouraged' by someone to pillory non-US companies, which is why they're always taking pops at Toyota to help GM and Ford sell more cars.

So I suppose the same could happen to BP and they'll be a whipping boy to favour Exxon/Chevron/Conoco. Protectionism!

Best bet is to boycott all Kraft products in return

JamesU

StevieJ wrote: »

Didn't James suggest the fund has a cap at one billion?

http://www.uscg.mil/npfc/About_NPFC/osltf.asp

Barrel tax until fund reached $1 billion, but within the link further detail: "The Energy Policy Act of 2005 increased the maximum size of the Fund to $2.7 billion."

JamesU

1echidna

Democrats (DSCC) now using BP Gulf of Mexico oil spill tragedy to beg for money

How low can Democrats go? I don’t know if their is a basement they will ever reach. The latest pathetic example of Democrats is their attempt to make money off the 11 deaths from the BP oil rig explosion and subsequent oil spill. Gateway Pundit posted a copy of the e-mail that the Democratic Senatorial Campaign Committee (DSCC) sent to supporters as fundraising plea to: “Help President Obama hold BP accountable.” Democrats are shamelessly politicizing a tragedy that resulted in the deaths of 11 individuals.
nt

Goodness knows what this means other than they play very dirty across the pond.

1echidna

There is some criticism of BPs public relations. However, so far at least, they seem to have avoided their name becoming part of the incident as Exxon's was with the "Exxon Valdez" incident. So far it seems to be known just as "Oil Spill" "Louisiana Oil Spill" "Gulf Oil Spill" "Gulf of Mexico Oil Spill" "Deepwater Horizon spill" and only occasionally "BP Oil Spill". Just judging from what Google and Twitter throw up.

TRUSt_NO_1_2

JamesU wrote: »

Barrel tax until fund reached $1 billion, but within the link further detail: "The Energy Policy Act of 2005 increased the maximum size of the Fund to $2.7 billion."

JamesU

The fund appears to be just a vehicle to provide immediate 'cash' to deal with an oil spill.
It's current fund may well stand at $2.7 billion,but it will be obligated to pay all claims.
The fund spends money and recoups that money as it is spent from the RP ..in this case BP) responsible party.
But the limited liability clause, somehere in the bowels of US law, limits BP's liability (I will find conclusive proof of this)..but this quote seems proof :

The White House and U.S. lawmakers vowed to review a law limiting BP's liability for lost revenues from fishing, tourism and other businesses to $75 million and raise it to $10 billion.

This would mean BP would be able to re-claim most of the damages costs (not the clean up...which they have emphasised they will pay for...because they know they are legally bound to do so !!)

They will however be able to recalim the vast majority of damages claims (where the numbers will be humungous as environmental claims can be made almost any environmental agency )
back from the fund,(probably behind closed doors like the multiple recent financial sector bail outs).

The fund will in effect be broke...and will have to be funded by the US taxpayer ?
So BP is 'playing ball',so as not to jeopardise it's limited liability.

1echidna

Steve Gelsi of MarketWatch reports that in a closed-door meeting with Congress, BP officials have significantly raised the estimated leakage from the oil spill. Although the earlier number estimated approximately 5,000 barrels of crude oil were spewing into the ocean, BP officials now peg the daily output around 60,000 barrels a day.
Reports MarketWatch:
BP officials said the larger figure represents a worst-case scenario. BP spokesman Toby Odone declined to comment on the 60,000 barrel figure, which was reported by The New York Times. The official tally remains up to 5,000 barrels a day, he said.
Meanwhile the Obama administration signaled it would support a fresh push in Congress to raise the oil spill liability limit to $10 billion from $75 million, according to reports.
The existing cap on other damages is included in the Oil Pollution Act. BP has already said it is willing and expects to pay more than $74 million.

Read more: http://dailycaller.com/2010/05/05/bp-significantly-ups-oil-spill-estimate/#ixzz0n5JCjv8g

I fear that BP are not off the hook at all.