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 murder of fearless journalist Pavel Sheremet must be solved - but Ukraine needs more

Sheremet was blown up as he drove to host a morning radio programme

On 20th of July Kiev was shaken by the news of the assassination of the respected Belarusian journalist Pavel Sheremet. Outside the ex-Soviet republics he was hardly known. Yet the murder is one that the West should reflect on, as it could do much to aggravate the Ukrainian-Russian conflict. 

Sheremet was one of the most significant and high profile investigative journalists of his generation. His career as an archetypal  examiner of the post-Soviet regimes in Belarus, Ukraine and Russia bought him fame and notoriety in the region. From 1997 onwards Sheremet became a name for fearless and non-partisan interrogation, both in print and as also as TV presenter. He paid the price early on when he was incarcerated by the Belarus government, then stripped of his Belarusian nationality and deported. Such is the way of things in the region.

Taking up residence in Kiev, Sheremet became immersed in interrogating the political life of Ukraine. He wrote for the Ukrayinska Pravda publication and also helped to develop a journalism school. Under these auspices he was a participant of a congress, "The dialogue between Ukraine and Russia", in April 2014. He reported on beginnings of the Euromaidan uprising. He warned of the rise of the concept  of "Novorossia" and suggested that Ukraine needed to reset its current status and stand up to Russian pressure. After the Russian occupation of Crimea his blame for the Ukrainian government was ferocious. He alleged that that they "left their soldiers face to face the [Russian] aggressor and had given up the Crimean peninsula with no attempt to defend it." These, he said "are going to be the most disgraceful pages of Ukrainian history."

Sheremet was blown up at 7.45am on 20 July as he drove to host a morning radio programme.

Ukraine is a dangerous place for journalists. Fifty of them have been murdered since Ukraine achieved independence. However, this murder is different from the others. Firstly, both the Ukrainian President and the Interior minister immediately sought assistance from FBI and EU investigators. For once it seems that the Ukrainian government is serious about solving this crime. Secondly, this IED type assassination had all the trappings of a professional operation. To blow a car up in rush hour Kiev needs a surveillance team and sophisticated explosive expertise. 

Where to lay the blame? Pavel Sheremet had plenty of enemies, including those in power in Belarus, Russia and the militias in Ukraine (his last blog warned of a possible coup by the militias). But Ukraine needs assistance beyond investigators from the FBI and the EU. It needs more financial help to support credible investigative journalism.   

The murder of Pavel Sheremet was an attack on the already fragile Ukrainian civil society, a country on the doorstep of the EU. The fear is that the latest murder might well be the beginning of worse to come.

Mohammad Zahoor is the publisher of Ukrainian newspaper The Kyiv Post.