BP IS likely to be cleared of the potentially ruinous charge of gross negligence, according to City analysts, after a powerful US commission blamed “systemic” causes for the Gulf of Mexico oil spill.
The company’s shares rose by more than 2 per cent in trading yesterday morning after Barack Obama’s national commission released part of its final report into the disaster, before full publication on Tuesday.
The report is the first of several parallel investigations, and will influence the crucial inquiry carried out by the US department of justice. Unless evidence comes to light showing BP wilfully or singularly disregarded safety in the run-up to the world’s biggest accidental offshore oil spill, the department is unlikely to contradict the commission’s findings and recommend a charge of gross negligence. BP is understood to expect the department to end its inquiry in the second half of this year.
BP’s shares have recovered almost two-thirds of their lost value since the crisis peaked in June, as investors bet the worst is over. Peter Hitchens, of stockbrokers Panmure Gordon Co, said he expected BP to resume paying dividends – suspended last summer under intense White House pressure – when it reports on February 1st. Mr Hitchens 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 which led to the disaster. BP had a near-death experience. But time is a great healer for BP it seems.”
The national commission said its investigation found no evidence the blowout was the result of “aberrational decisions made by rogue industry or government officials”. BP’s contractors – the rig’s owner, Transocean, and Halliburton, responsible for cementing the faulty well – were also found to be at fault. The report was highly critical of the now disbanded US offshore regulator, the MMS, and Tuesday’s full report is likely to recommend much tighter safety regulations.
Charlie Kronick, a spokesman for Greenpeace, said: “The report sets up a big flag that the regulatory regime is going to be much tighter.” But he said pointing the finger at BP’s contractors should not exonerate BP from blame.
“Halliburton and Transocean were operating on BP’s behalf. It’s hard to see how that lets BP off the hook.” BP last estimated its costs from the disaster in November at $40 billion. But its final bill is likely to be closer to $20 billion.
Ken Feinberg, appointed by the White House to operate BP’s claims facility, paying compensation to affected Gulf residents and businesses, said this month the $20 billion allocated by BP would be “more than enough”. BP will recoup any funds left over.
Not being found grossly negligent would allow BP bill its junior partners in the Macondo Well, Anadarko and Mitsui, for a third of the costs. US federal fines would triple under a gross negligence finding, with JP Morgan putting the bill under this scenario as high as $69 billion. – (Guardian service)