BP disaster fund almost drained

Faces ever higher legal payouts.

BP has today announced that the $20 bn fund it set up to pay compensation claims in the wake of the 2010 Deepwater Horizon disaster is down to its last $300m, with the deadline for business to claim loss of earnings not arriving until April 2014.

This leaves future profits exposed as the company has made clear that once the fund has run dry, further claims will come directly from the balance sheet; “We expect that, in the third quarter, the remaining amount for items covered by the trust will be fully utilised and additional amounts will be charged to the income statement."

This exposure, coupled with a stronger US dollar and the lagging effect of export duty on Russian oil are likely to further damage profits at the multinational, resulting in shares falling by more than 4 per cent in London trading.

The news that BP has nearly spent $20 billion on claims and more than $40 billion in total when clean up costs are considered, must be particularly galling given last week’s news that Halliburton has gotten away with little more than a slapped wrist for its part in the disaster.

BP has long claimed that it is not solely responsible for the disaster, in which 11 people lost their lives and saw the Macondo well release nearly 5 million barrels of oil into the Gulf of Mexico until it was capped in July 2010 after 87 days. Contractors Transocean, Cameron and Halliburton must also shoulder some of the blame for the catastrophic well blowout, according to BP.

But Halliburton has so far avoided much of the fallout which BP has been paying for, making just one voluntary payment of $55m to the National Fish and Wildlife Foundation. Last week, the company finally admitted its part in the disaster; pleading guilty to the charge it had destroyed evidence relating to its role in the cementing of the Macondo well prior to the blowout.

In a statement, the company said: “A Halliburton subsidiary has agreed to plead guilty to one misdemeanour violation associated with the deletion of records created after the Macondo well incident, to pay the statutory maximum fine of $200,000 and to accept a term of three years probation”.

This $200,000 pales in comparison to BP’s exposure, but could yet weaken their position in trying to negotiate a settlement in the civil trail which is still ongoing in the US.

Photograph: Getty Images

Mark Brierley is a group editor at Global Trade Media

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The SNP thinks it knows how to kill hard Brexit

The Supreme Court ruled MPs must have a say in triggering Article 50. But the opposition must unite to succeed. 

For a few minutes on Tuesday morning, the crowd in the Supreme Court listened as the verdict was read out. Parliament must have the right to authorise the triggering of Article 50. The devolved nations would not get a veto. 

There was a moment of silence. And then the opponents of hard Brexit hit the phones. 

For the Scottish government, the pro-Remain members of the Welsh Assembly and Sinn Féin in Northern Ireland, the victory was bittersweet. 

The ruling prompted Scotland’s First Minister, Nicola Sturgeon, to ask: “Is it better that we take our future into our own hands?”

Ever the pragmatist, though, Sturgeon has simultaneously released her Westminster attack dogs. 

Within minutes of the ruling, the SNP had vowed to put forward 50 amendments (see what they did there) to UK government legislation before Article 50 is enacted. 

This includes the demand for a Brexit white paper – shared by MPs from all parties – to a clause designed to prevent the UK reverting to World Trade Organisation rules if a deal is not agreed. 

But with Labour planning to approve the triggering of Article 50, can the SNP cause havoc with the government’s plans, or will it simply be a chorus of disapproval in the rest of Parliament’s ear?

The SNP can expect some support. Individual SNP MPs have already successfully worked with Labour MPs on issues such as benefit cuts. Pro-Remain Labour backbenchers opposed to Article 50 will not rule out “holding hands with the devil to cross the bridge”, as one insider put it. The sole Green MP, Caroline Lucas, will consider backing SNP amendments she agrees with as well as tabling her own. 

But meanwhile, other opposition parties are seeking their own amendments. Jeremy Corbyn said Labour will seek amendments to stop the Conservatives turning the UK “into a bargain basement tax haven” and is demanding tariff-free access to the EU. 

Separately, the Liberal Democrats are seeking three main amendments – single market membership, rights for EU nationals and a referendum on the deal, which is a “red line”.

Meanwhile, pro-Remain Tory backbenchers are watching their leadership closely to decide how far to stray from the party line. 

But if the Article 50 ruling has woken Parliament up, the initial reaction has been chaotic rather than collaborative. Despite the Lib Dems’ position as the most UK-wide anti-Brexit voice, neither the SNP nor Labour managed to co-ordinate with them. 

Indeed, the Lib Dems look set to vote against Labour’s tariff-free amendment on the grounds it is not good enough, while expecting Labour to vote against their demand of membership of the single market. 

The question for all opposition parties is whether they can find enough amendments to agree on to force the government onto the defensive. Otherwise, this defeat for the government is hardly a defeat at all. 

 

Julia Rampen is the editor of The Staggers, The New Statesman's online rolling politics blog. She was previously deputy editor at Mirror Money Online and has worked as a financial journalist for several trade magazines.