Will BP manage to assoil or simply be forever Ass Oil?

BP in the firing line. And did America's dependency on cheap oil put them there? (© )

It must be hoped that we have passed through the worst part of the BP oil spill. There are signals that this may indeed be the case, one of the clearest ones being that members of the Obama administration have started referring to British Petroleum by its correct name of BP again. 

The recriminations have been fierce, and rightly so. The circumstances around the BP Deepwater Horizon oil spill  brings into close relief not only the tremendous potential for environment damage when things go wrong, but the whole issue of oil companies, US and British, drilling at depths where the company is not able to exercise complete control over the process. A situation exacerbated by the fact the cavalry could not come to the rescue because of lack of experienced strategists and suitable resources which forced them to rely on the prospectors to sort out their own mess, whilst under fire from the pointed arrows of the media Indians, with just a little help from the rest of the US’s oil cowboys. 

So in the final analysis will BP be able to assoil the situation or will the situation make BP “Ass Oil” for a very long time to come? 

as·soil (ə so̵il

(transitive verb) 

  1. to absolve or acquit
  2. to atone for

The fact that BP has accepted liability with only limited caveats (“how the accident happened), has paid £1 billion in clear up costs and continues to meet all validated claims should ensure BP retains it position in the USA. Especially when it is considered Exxon, an American company, did everything in its power to limit liability and its payouts in respect of the Exxon Valdez

Still none of this really matters until the oil is all cleared up, wildlife is free from threat and fishing can once again recommence along the Gulf Coast. So what is BP saying about the situation? 

Andrew Marr (AM) highly respected British political correspondent interviewed Tony Heywood (TH), BP’s Chief Executive on the BBC this morning about the oil spill:  

 http://news.bbc.co.uk/1/hi/world/us_and_canada/10248409.stm 

 Just in case the clip can not be viewed worldwide because of copyright I include a transcript: 

TH: BP is a very strong company its operations today are running extremely well, it’s generating a lot of cash flow it has a very strong balance sheet. 

Our reputation has been based on thousands of people over a long period of time, in BP doing the right thing. And we are doing everything we can to do the right thing. We are going to stop the leak, were going to clean up the oil, were going to remediate any environmental damage, and we are going to return the gulf coast to the position it was in prior to this event.  

That’s an absolute commitment and we will be there, long after the media has gone, making good on our promises. 

AM:  And once you have done all of that, will you be paying the dividend to your investors… 

TH: We are going to take care of all our stakeholders. We have take care of our Gulf coast shareholders, we have to take care of our… investors, we have to take of our employee’s, our retiree’s, we are going to take care of all of our stakeholders.  

AM: The dividend is due in July, end of July, is it going to be paid? 

TH:  That will be a decision for the board, at the end of July, when they will take all circumstances and issues into account when making that decision. 

AM: Quite clearly President Obama wants you not to pay that dividend, or at least only to pay it if you’ve up what your offering to shrimper farms and people around the coast. 

TH: What we have done so far is pay every claim that has been presented to us. And we will continue to do that. 

Being an all encompassing interview (almost a PESTEL) the subject of the company dividend turned up. This in the case of BP is a substantial payment and a lot of UK pension funds depend on income from BP’s dividends, and a large number of private investors in the US and UK too. Tony Hayward at least had the good sense to give pre-eminence to the “Gulf Coast Stakeholders”. 

Tony Haywood was in an invidious position in this interview. He had to answer questions about finances as the share price has tumbled but talking about money and investors just feels wrong when the oil is still washing up on shore. It is absolutely right to pay the claims to those whose incomes are affected by the oil, and to key paying valid claims, but President Obama appears by his focus on the compensation required to be positioning this environmental tragedy as one that can be ameliorated by money. Well he does have American Cultural precedent on his presidential side!

This approach is perhaps symptomatic of the fact that President Obama he has been rendered obsolete in the progress of affecting a solution to the spill, as he does not have the technology at his disposal and yet has made the mistake of positioning himself centre stage.  Sorting out the finances is all he can do. What he does next is all important. 

Tony Heywood has appeared in everything he has done to militate the situation, and whilst we all realise that he is in the hands of his engineers and is caught in a wait and see situation, one might have expect someone in his position to eschew the purely pragmatic and deliver some emotion. The human condition being what it is we may not have trusted the man wringing his hands and offering platitudes with being able to solve this problem. Whatever the emotional component clear rational thinking and a thoughtful calculate approach is what is needed to solve the problem. But has he been to cool? 

Perhaps if this was in Alaska he could have been as cool as the Exxon Directors were but not on the equally beautiful, but swing voting, Gulf Coast – specifically Florida. I think he performed much better today but still I would have liked him to use “ameliorate” and “remediate”.  At least after all the inconvenience and disruption, never mind the heartache and damage, they could be striving to make a commitment to make things better (i.e. less polluted) than they were before the incident. 

For essential further reading on the subject: