X hits on this document

306 views

0 shares

0 downloads

0 comments

43 / 128

Triple Crunch Log                                                                                                            

UK budget deficit will be hit by BP tax drop: the company will pay an estimated $10bn less in tax over the next four years, as a result of offsets against clean up costs. If the well is capped by August, total costs to BP could be around $30bn, analysts estimate: $10bn in cleanup and $20bn in compensation. BP paid $8.4bn in taxes worldwide last year. 561

With BP’s troubles, Britain’s post-imperial “delusions of grandeur have been cruelly exposed.” So argues Madeleine Bunting in the Guardian. “In many areas of the world, BP was British foreign policy by another route, extending influence much as the East India Company had done in an earlier era. Browne himself admitted in an interview that while the government believed the flag leads and trade follows, in BP's case it was usually the other way round. When BP arrived in Azerbaijan, the first British government representative borrowed office space from them.”562

Expert in shale gas expresses mixed feelings about safety and profitability in an interview in the FT Terry Engelder, professor of geosciences at Pennsylvania State University: “It’s very clear that the industry should make every effort to protect these [fracking] fluids getting into surface waters or ground waters. A policy of zero tolerance is very important when it comes to the mixing of these chemicals, or at least the fluids with the biosphere. At the same time, this industry is one that’s very complex, there are a lot of risks, and the work toward zero tolerance is very important, [but] I don’t think it will ever be achieved.” … “There’s one school that claims these wells reach a state of linear decline, they decrease production more rapidly than industry expects. I haven’t seen any evidence of that… A lot of the capital markets people would be very disappointed if it is linear.” …. “The silver lining of the Gulf accident is that each of the operators is looking at that and thinking, gosh that could be us. Industry was moving carelessly in the GOM; the same thing could be happening in the gas shale. You might call that self-regulation. Self-regulation is important in itself but it is not adequate.” 563

13.7.10. BP places a new capping stack over its leaking riser ready for a well integrity test tomorrow. The valves have not yet been closed. BP’s Doug Suttles: “…the purposes of the integrity test is to determine if we believe we have the flow contained within the casing of the well. So in this particular case, if we see high pressures it’s a good sign. It actually means that the flow and the oil is fully contained in the existing well.” And if not? “If we see low pressures, then that would indicate that potentially oil is escaping out of the casing at some point. So in this particular test what we’re hoping to see is full shut in pressures. Which would indicate that the casing’s intact.”564

US Senators are looking for other avenues to target BP, including links with Libya. The Senate foreign relations committee is about to consider a request from Frank Lautenberg, a Democratic senator from New Jersey, for an investigation of accusations that BP helped secure the early release of Abdel Basset al-Megrahi, the man convicted of the Lockerbie bomb atrocity, freed by Scottish authorities last year. BP says a “matter of public record” it had discussed with the UK government its concern at the slow progress in releasing Mr Megrahi. Andrew Gowers, a BP spokesman: “Like many others we were aware that a delay might have negative consequences for UK commercial interests, including ratification of BP’s exploration agreement.”565

Obama renews ban on deepwater drilling, with only a slight change to get round the court ruling overturning the ban: the terms could allow some drilling to resume. All drilling below 500 feet is affected and it now applies to any deepwater floating facility. The initial ban suspended drilling at 33 exploratory wells. Drilling can resume of companies can prove they can shut down a leaking well immediately. The ban lasts until 30 November.  The Republicans call it a “job-killing moratorium”, and the US Chamber of Commerce agrees.566

IEA forecasts oil demand will slow in 2011. FT: “The International Energy Agency, in its latest oil market report, predicts that the increase in oil demand will slow next year to a 1.3m barrel/day increase, from a 1.8m b/d rise in 2010. The agency, which warned several times last year of a “supply crunch” due to falling investment in upstream production, is much more sanguine these days on the supply-demand balance. Its new report notes some supply concerns, particularly around Iran, but says that investment in upstream production seems to be stable. “Whisper it quietly, but we might, just might, be in for some market stability for a while longer,” it says of its 2011 forecasts. This decreasing rate of demand between 2009-10 and 2010-11 comes despite forecast on a rising rate of GDP growth; from 4.1 per cent in 2010 to 4.3 per cent in 2011.” Anticipated slowing of Chinese growth is the main reason.567

Oil well drilled off the Falklands comes in dry. Shares of the small company drilling it, Falkland Oil and Gas, fall off a cliff. But the company reminds the city that six wells were drilled in the North Sea before oil was found.568

European energy and industrial groups spent £800m on carbon credits from the developing world in 2009. That makes them the most important buyers in the world. Vattenfall was the biggest, covering about 7.4% of its emissions. The UN CDM scheme is often cheaper than the EUETS. The biggest source is projects to destroy industrial gases, an increasingly controversial area. FT: “Some of these factories – which are mainly situated in China – are making more money from selling credits to destroy the byproduct than they make from their refrigeration production. This gives factory owners an incentive, say critics, to keep the plants running when in other circumstances they might have closed down.”569

14.7.10. US Energy Secretary and USGS stop Macondo integrity test pending “further analysis.” Incident commander Admiral Thad Allen: “Today I met with Secretary Chu, Marcia McNutt and other scientists and geologists as well as officials from BP and other industry representatives as we continue to prepare and review protocols for the well integrity test - including the seismic mapping run that was made around the well site this morning. As a result of these discussions, we decided that the process may benefit from additional analysis that will be performed tonight and tomorrow.” FT: “Perhaps the fear from the administration it is that shutting the valves off completely, even for a test of several hours, would actually threaten the well casing.”570

Experts fear shutting the valves and even testing the well could rupture the casing. George Hirasaki, a former Shell engineer now at Rice University in Houston, warned: “If the casing is damaged and the flow is restricted at the sea floor, then oil and gas will flow behind the casing and charge up shallow formations with oil and gas.” FT: “The oil and gas in those shallow formations could seep up to the seabed and escape into the water, creating leaks that would be impossible to contain, unlike the manageable flow now coming up the well.”571

US lawmakers take first steps to bar BP from US drilling leases. FT: “BP faced more problems on Capitol

Document info
Document views306
Page views306
Page last viewedSun Dec 04 02:48:49 UTC 2016
Pages128
Paragraphs2571
Words135569

Comments