BP may emerge unscathed after 11 deaths

CLEANING UP? BP's well remunerated directors may emerge from the Deepwater Horizon disaster with a squeaky clean record, despite the 11 deaths in the Gulf coming just five years after it killed 15 at its Texas City refinery.

The share price of UK oil multinational BP soared this week after the company indicated the leaking well in the Gulf of Mexico had been “killed”. The company has spent five months attempting to seal its Macondo well, after a 20 April explosion on the Deepwater Horizon rig killed 11 workers and triggered an environmental catastrophe.

The share price surge came as more optimistic analysts predicted legal claims arising from the disaster could be significantly below the $20bn (£13bn) set aside by BP and a leading US campaign group, Public Citizen, ended its ‘Beyond BP’ call for a boycott of the oil company.

BP said the disaster, which involved a spill of 4.9m barrels of oil into the Gulf of Mexico, had so far cost the company $9.5bn. Approximately 25,200 personnel, more than 2,600 vessels and dozens of aircraft remain engaged in the response effort, the company said.

Jason Kenney, an oil analyst at ING Barings, told UK paper The Guardian BP’s sale of non-core assets to pay for the disaster could, ironically, benefit the company.

“They’re still investible; they’re still credible; they’re very much alive and they could come out of this reinvigorated,” said Kenney, who believes BP is unlikely to face criminal charges for the explosion. “I think, in time, we’ll look back at this and the US will be quite happy with a record financial penalty and not necessarily look at charging BP on a criminal basis.”

A 19 September statement from the BP America chair and president Lamar McKay, marking the completion of the relief well, pressed home the message that BP was a responsible corporate player that had emerged from the “tragedy” with valuable expertise. Sidestepping any mention of “oil”, “pollution” or “deaths”, McKay set about spinning a cocoon of virtue around the company’s “accomplishment” and its eagerness to allow others to learn from its “important insights”.

“Today’s completion of relief well operations on the Macondo well is a significant technological accomplishment and another important milestone in our continued efforts to restore the Gulf Coast,” McKay’s statement said. “BP will continue sharing what we have learned in an effort to prevent a tragedy like this from ever being repeated. We also believe that the industry will gain important insights on how to be better prepared to respond to any future incidents.”

Two official US investigations are set to signal whether BP is judged “grossly negligent” in the Gulf disaster. The rulings have serious implications for the company, as they will influence whether BP alone carries the can, or whether the blame is shared with its minority partners on the Deepwater venture and with Transocean, Halliburton or Cameron, other major firms involved in development of the well.

The presidential commission investigating the disaster is due to deliver its findings in January and, at about the same time, a US coastguard panel will present its conclusions.

When it came to any suggestion of criminal liability, BP got its marker in early. In July this year it declared it did not believe it has been grossly negligent in regard to the Deepwater Horizon disaster. The announcement came the day BP announced chief executive Tony Hayward was to leave his post on 1 October.

On 15 September, Hayward defended the firm’s safety record in the North Sea, insisting recent criticisms had not exposed “any fundamental weakness”. In his first and probably last UK appearance since the Deepwater Horizon explosion, Hayward told a committee of MPs that disaster had been personally “devastating” because he had made safety the firm’s top priority – but he was forced to explain to the Energy and Climate Change Committee why inspections on BP’s North Sea installations found some did not comply with guidelines over regular training for operators on how to respond to an incident.

What is known already is that proven criminal culpability in the Texas City refinery explosion which killed 15 in 2005 – and which has killed a number of workers since and only this week saw two employees hospitalised with steam burns – was not enough to see any company director face criminal charges, let alone a jail term. It wasn’t even enough to get the company to remedy hundreds of safety flaws or prevent new ones.

With BP and market analysts already indicating the worst is behind them, the signs are that adding environmental devastation and 11 more deaths to the price of BP’s oil lust, will again see the company’s directors maintain their plush, well remunerated seats in the boardroom without fear of even answering for their crimes in court.

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