BP loses bid to cut maximum $13.7 billion Gulf spill fine

BP loses bid to cut maximum $13.7 billion Gulf spill fine

Feb 20th, 2015 

by John Donovan. 

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BY JONATHAN STEMPEL
Thu Feb 19, 2015 9:04pm EST

(Reuters) – A U.S. judge on Thursday rejected BP Plc’s (BP.L) attempt to reduce the maximum civil fine it could face for its role in the 2010 Gulf of Mexico oil spill, leaving it potentially liable to pay $13.7 billion under the federal Clean Water Act.

U.S. District Judge Carl Barbier in New Orleans agreed with the federal government that the maximum civil penalty that BP could face is $4,300 per barrel spilled.

BP had sought a $3,000 per barrel maximum, equal to a maximum $9.57 billion civil fine. Barbier has not decided how much BP should pay, and it is unclear when he will.

Setting a fine is the last step in a civil trial overseen by Barbier to determine responsibility and penalties for the April 20, 2010 blowout of the Macondo oil well, which killed 11 workers and caused the largest U.S. offshore oil spill.

BP spokesman Geoff Morrell said the company disagrees with the decision and is considering its legal options.

Barbier previously ruled that BP had acted with gross negligence or willful misconduct and that 3.19 million barrels of oil were spilled. These factors are used to set the maximum civil fine.

BP had argued that the Clean Water Act in 1990 capped the maximum fine at $3,000 per barrel in cases of gross negligence or willful misconduct.

But the judge agreed with the government that the U.S. Environmental Protection Agency could raise the maximum to account for inflation and was required to do so by Congress.

Accepting BP’s position “would invalidate nearly every agency’s attempt to inflate civil penalties that can be sought in federal court,” Barbier said.

BP has incurred more than $42 billion of costs for the spill, including for cleanup, fines and compensation to victims.

It has said any Clean Water Act penalty should reflect the company’s extensive cleanup efforts and that the Gulf region has had a solid recovery from the spill.

The case is In re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, U.S. District Court, Eastern District of Louisiana, No. 10-md-02179.

(Reporting by Jonathan Stempel in New York; Editing by Cynthia Osterman and Steve Orlofsky)

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Posted in: BP, Environment, Gulf of Mexico, Litigation, Oil Spill, Reuters, United States.
Tagged: BP · Gulf of Mexico · Litigation · Oil

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EXXON MOBIL REFINERY IN TORRANCE DAMAGED AFTER EXPLOSION

Wednesday, February 18, 2015 09:09PM


TORRANCE, Calif. (KABC) --

An explosion at the Exxon Mobil refinery caused structural damage and was felt for miles around Torrance on Wednesday, but there were no major injuries.

The blast happened in a processing unit at the refinery in the 3700 block of 190th Street at 8:50 a.m. The explosion was followed by a ground fire, which was quickly knocked down.

The explosion was so strong that it registered as a 1.7-magnitude earthquake on a nearby seismometer operated by Caltech and USGS.

Employees say they first noticed a smell and then heard and felt the explosion. 

Rodney Payne was part of an electrical crew working near the processing building that exploded.

"I was maybe 100 yards away from the explosion," Payne said. "I can see the billowing of the smoke and the fumes coming, so I just located my guys and told them that we gotta go."

Exxon Mobil said in a statement that four contractors were transported to Long Beach Medical Center for minor injuries, and everyone was accounted for.

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TAKE THE POLL: Are corporations paying their fair share in federal taxes?

Sen. Bernie Sanders this week issued a new report that provides a fresh glimpse into the far-reaching corporate tax avoidance strategies of large and profitable companies represented by the Business Roundtable, including what he calls the "legalized tax fraud” of sheltering profits in offshore tax havens. The report shows for the first time how more than half of the companies represented by the Business Roundtable are collectively holding more than $1 trillion in profits in offshore tax haven countries where money is not subject to U.S. taxes. A number of huge corporations – including General Electric, Boeing, Duke Energy and Verizon – not only have paid nothing in federal income tax in recent years, they received refunds from the IRS.“Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit,” Bernie said. "At a time when corporations are making record-breaking profits, while the middle class is disappearing and senior poverty is on the rise, the last thing we should be doing is giving huge tax breaks to profitable corporations that don’t need it.” Bernie will soon reintroduce legislation to crack down on corporate tax avoidance by making sure that profits shifted to offshore tax haven subsidiaries are taxed at the top U.S. corporate tax rate.

	READ THE REPORT

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COJUANGCO JOINS THE CALL FOR PEOPLE POWER 3

FROM THE MANILA TIMES  

Thu, Feb 19, 2015, 6:09 AM PHT

Peping joins clamor to oust President

December 1, 2014 11:08 pm

by JOEL M. SY EGCO SENIOR REPORTER

Cojuangco

Former congressman Jose “Peping” Cojuangco, an uncle of President Benigno Aquino 3rd has joined a movement to establish a “transition government” that will be headed by former Supreme Court Chief Justice Reynato Puno to support the call of the National Transformation Council (NTC) for the country’s incumbent leader to step down, a highly reliable source told The Manila Times on Monday.

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Why Stocks Of Chevron Corporation, Exxon Mobil, Royal Dutch Shell, And ConocoPhillips Should Be Avoided

Why Stocks Of Chevron Corporation, Exxon Mobil, Royal Dutch Shell, And ConocoPhillips Should Be Avoided

Feb 18th, 2015

by John Donovan. 

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Why Stocks Of Chevron Corporation, Exxon Mobil, Royal Dutch Shell, And ConocoPhillips Should Be Avoided

Bidness Etc looks at why Barron’s Asia advises new investors against buying stocks of the four Big Oil companies, namely, Exxon, Chevron, Shell, and ConocoPhillips

By: MICHEAL KAUFMAN

Published: Feb 18, 2015 at 6:36 am EST

Extracts

Crude oil price have dramatically decreased more than 50% since June 2014. Amid the low-price scenario, Barron’s Asia believes that new investors should avoid placing their bets on the four Big Oil companies, comprising, Royal Dutch Shell plc (ADR) (NYSE:RDS.A), Chevron Corporation (NYSE:CVX), Exxon Mobil Corporation (NYSE:XOM), and ConocoPhillips (NYSE:COP).

Barrion’s Asia terms these stocks as the most defensive energy stocks mainly due to minor changes in the value of these stocks since mid-October. The West Texas Intermediate has fallen more than 35% over the same period.

Due to the defensive nature of these stocks, it is believed that new money must not be invested into these stocks. Any uplift in the crude oil price may offer a little upside on these stocks. On the contrary, if oil price remains at the current level or falls, the stocks of these companies might be vulnerable and may even experience a decline throughout 2015. 

These companies will face a tough challenge in the upcoming months. The capital spending costs have increased sharply and crude oil price is at a low, however, overall global energy demand is increasing slowly. As reported by Barron’s Asia, the global energy demand is growing at about half the rate of the world’s Gross Domestic Product.

Although these companies maintain adequate dividends, these dividends are not expected to be funded from the free cash flow of the companies. They are either to be funded by debt or divestment of assets.

Shell is expected to finance all of its $12 billion dividends through debt.

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Posted in: Chevron, Conoco Phillips, Exxon Mobil, Oil Company Profits, Oil Prices, Royal Dutch Shell Plc.
Tagged: Chevron · ConocoPhillips · ExxonMobil · Royal Dutch Shell Plc · Shell

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Shell and Exxon ignored seismic dangers at Groningen Gas Field

Shell and Exxon ignored seismic dangers at Groningen Gas Field

Feb 18th, 2015

by John Donovan. 

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Danger of earthquakes at Groningen gas field ignored – Dutch safety board

Feb 18 (Reuters) – The dangers caused by gas extraction at the massive Groningen field were ignored for years by operators Royal Dutch Shell, Exxon Mobil Corp and government agencies, the Dutch Safety Board said in a report on Wednesday.

A correlation between gas extraction and earthquakes in the region was clear in 1993, the board said, but “the risks to residents were not recognised”.

Maximising profit was prioritised over safety issues, said the board.

(Reporting By Anthony Deutsch; Editing by Pravin Char)

SOURCE

UPDATE 1-Dutch gas field earthquake dangers ignored for years-safety board

(Adds detail, background)

By Anthony Deutsch

Feb 18 (Reuters) – Royal Dutch Shell, Exxon Mobil Corp and Dutch government agencies ignored the dangers caused by gas extraction at the massive Groningen gas field for years, a report from the Dutch Safety Board said on Wednesday.

A correlation between gas extraction and earthquakes in the region was clear in 1993, but “the risks to residents were not recognised”, it said.

An investigation was launched a year ago to determine whether the safety of residents had been taken into consideration.

On Wednesday the board’s report concluded that the Economy Ministry, State Supervision of Mines and the NAM, the Shell-Exxon Mobil joint venture which operates the gas field, worked collectively with a common aim of maximising production.

“The parties concerned considered the safety risk to the population to be negligible and thus disregarded the uncertainties surrounding this risk assessment,” it said.

They “failed to act with due care for citizen safety in Groningen with regard to the earthquakes caused by gas extraction,” it concluded.

The Dutch government this month ordered a reduction in production from the field, the largest in the European Union, to 16.5 billion cubic metres (bcm) in the first half of 2015. It is considering permanently reducing output to below a current annual cap for 2015 of 39.4 bcm.

Economy Minister Henk has said production could be as low as an annual 35 bcm if studies indicate that a higher level is unsafe and if the Netherlands can still meet domestic needs and delivery contracts.

Gas extraction has resulted in increasingly strong earth tremors, some measuring as much as 3.6 on the Richter scale.

The cost of damage repairs, structural improvements to buildings, and compensation for home value decreases has been estimated at 6.5 billion euros. Around 35,000 homes are said to be affected, parliament heard last week.

Dutch gas exports in 2012 totalled nearly 57.3 bcm, or around 12 percent of Europe’s gas demand, about 75 percent of it from the Groningen field.

The field is operated by government-owned Gasunie and output is jointly exploited by the government, Royal Dutch Shell and Exxon Mobil through the NAM (Nederlandse Aardolie Maatschappij) joint venture.

(Editing by Jason Neely)

SOURCE 

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What’s Causing the Huge Spike in Earthquakes in Oklahoma?

Dutch cabinet acts in response to Groningen gas field earthquakes

New earthquake in Groningen, city buildings shaken

Gas group NAM says more serious earthquakes will hit Groningen

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Posted in: Business Principles, Environment, Exxon Mobil, Gas, Royal Dutch Shell Plc.
Tagged: ExxonMobil · Royal Dutch Shell Plc

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BP plc And Royal Dutch Shell Plc Perilous Investment Traps?

BP plc And Royal Dutch Shell Plc Perilous Investment Traps?

Feb 18th, 2015

by John Donovan. 

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From an article by Royston Wild published 18 Feb 2015 by The Motley Fool under the headline:

“BP plc And Royal Dutch Shell Plc Are Perilous Investment Traps”

Extracts

Needless to say, the effect of an eroding oil price has proved catastrophic for the world’s fossil fuel specialists in recent months.

Indeed, a 47% decline in the Brent benchmark since June has been followed by heavy share price declines at both BP andRoyal Dutch Shell during this period.

Earnings picture does not merit premium prices

Prices in the oil producers have regained much ground since mid-December’s troughs, however, when reports first emerged that US shale producers have begun aggressively scaling back output in response to nosediving black gold prices. But this strong share price recovery has again cast doubt on whether the scale of the risks facing the two oil majors are not baked into the price.

Shell’s stock has flipped 13% higher from December’s three-year lows of 1,989p per share, while BP has advanced 21% from the winter nadir of 373.25p, the cheapest since autumn 2011.

I believe that investment in either of the oil plays remains perilous business despite the impact of reduced shale output from North America. With major producing nations like those of OPEC continuing to pump with a vengeance, and global economic growth in the doldrums, I reckon that the oil price could be set for fresh turmoil.

Shell’s assertion last month that “near-term oil prices will dictate the buyback pace” has raised doubts that the firm’s balance sheet could support generous shareholder rewards should the bottom line come under pressure. And significant investment scalebacks at both firms has also raised doubts over their capital strength. In light of a fragile outlook for the oil market, I believe that both growth and income hunters could be left sorely disappointed.

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Posted in: BP, Oil Company Profits, Oil Prices, Royal Dutch Shell Plc.
Tagged: BP · Oil Prices · Royal Dutch Shell Plc

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