6/16 US.- BP Deal: a "Tar Ball" in Global Finance Capital

BP: major finance corp. and U.S. partner

u.s. capitalist propaganda focus: 1] obscuring the intractable merger of US state & monopoly capital, political-economic nexus of fascism
2] relationship to the Marshall Islands, one of U.S. imperialism's key dependent surrogates
3] U.S. domination of Mexico and 'ownership' of the Gulf of Mexico ( part 2,forthcoming)

"We appreciated the constructive meeting conducted by the President and his senior advisers and are confident that the agreement announced today will provide greater comfort to the citizens of the Gulf coast and greater clarity to BP and its shareholders. We welcome the administration's statements acknowledging that BP is a strong company and that the administration has no interest in undermining the financial stability of BP. This agreement is a very significant step in clarifying and confirming our commitment to meet our obligations. We regret the cancellation and suspension of the dividends, but we concluded it was in the best interests of the Company and its shareholders."
BP Chairman Carl-Henric Svanberg

BP Stock Bobbles on $20 Billion Gulf Oil Spill Fund
Posted 12:31 PM 06/16/10
BP's (BP) stock rallied [nearly 5%] after the energy giant agreed to put $20 billion into an escrow account to pay for clean-up and damages...BP will also set up a $100 million fund for unemployed oil rig workers -- and announced it's suspending dividend payments for the remainder of the year.
full article http://www.dailyfinance.com/story/investing/bps-stock-pops-on-20-billion...

BP shares climb as company suspends dividend
June 16, 2010, 3:05 p.m. EDT
BP PLC (NYSE:BP) shares rose nearly 5% after the oil giant's board decided it will suspend dividend payments in the second and third quarters, and cancel the first-quarter payment due on June 21.

$20 Billion Check From BP plc?
June 15, 2010
Douglas A. McIntyre
BP plc (NYSE: BP) faces what may be the hardest decision in its history. The U.S. government has supposedly asked for a $20 billion escrow fund to cover clean-up costs and other liabilities stemming from the Deepwater Horizon disaster... the Obama administration will pressure BP to allow the fund to be administered by an independent third party. BP may have to write the check for PR and perhaps ethical reasons, but it will give up a great deal of the bargaining power it may have in the future...By succumbing to the request, BP may give up some of the future leverage it will have in court. Some members of Congress say that the oil company cut corners on the rig because it wanted to save money. Those documents released ahead of CEO Tony Hayward’s White House meeting this week are damning enough to make criminal and civil charges easier to bring and prove. BP will have to face the uncertainty that the $20 billion fund will be used to pay most claims, but it is hardly a guarantee that this will be the case.
BP has an alternative, and it is one the company should take. It should put the $20 billion into a special fund which it should administer itself...The primary reason for BP to run its own fund is so that it can keep a portion of the capital for claims that will tie it up in courts for years. It can see what Merck (NYSE: MRK) went through with Vioxx liabilities and the tobacco companies did with charges that they covered up the risks of smoking. If BP passes the power to control the $20 billion to an outside party, it gives up a large part of its ability to control its own financial fate.

media goes to work turning truth on its head...
Oil spill makes unlikely partners of BP and the federal government
Analysis by Joel Achenbach
... The question now is whether this marriage can be saved...The company's message: We're trying to do everything we can to fix this mess but at some point we have to draw the line...BP also wants the escrow account administered by someone the company can trust. All this is under negotiation and the fine details are likely to be hammered out before Obama shakes hands with BP chief executive Tony Hayward...The company knows the White House needs to score political points....according to the Wall Street Journal, officials in Alabama wanted BP to pay for sand barriers to protect beaches. BP was willing go to do so but also saw the advantage in letting the White House appear to be ordering BP to do it against the company's will. Hayward was quoted as saying, "Let the White House have the victory of announcing it, but it's the right thing for us to do." ...White House Press Secretary Robert Gibbs once again claimed that the White House has been bending BP to its will. "They're drilling not only a relief well to put a permanent end to this crisis in the gulf but they're drilling a second relief well at the cost of $100 million, not because they wanted to but because the government directed them to. They're increasing their containment strategy on the surface so that we can pump more oil up, not because they wanted to but because we directed them to," Gibbs said on CNN. A BP spokesman said the company had no response...

Offshore oil rigs are out of U.S. government's reach
Foreign flagging of offshore rigs skirts U.S. safety rules.
By Tom Hamburger and Kim Geiger, LA Times
June 14, 2010
The Deepwater Horizon oil rig that exploded in the Gulf of Mexico was built in South Korea. It was operated by a Swiss company under contract to a British oil firm. Primary responsibility for safety and other inspections rest...with the Republic of the Marshall Islands — a tiny, impoverished nation in the Pacific Ocean. And the Marshall Islands, a maze of tiny atolls, many smaller than the ill-fated oil rig, outsourced many of its responsibilities to private companies...Since World War II, thousands of ships and rigs from the U.S. and other industrialized countries have been registered in less-developed nations like the Marshall Islands...
Under International law, offshore oil rigs like the Deepwater Horizon are treated as ships, and companies are allowed to "register" them in unlikely places such as the Marshall Islands, Panama and Liberia — reducing the U.S. government's role in inspecting and enforcing safety and other standards...
Some offshore drilling experts, as well as some survivors of the explosion that led to the massive spill, say foreign registration also permitted a confusing command structure and understaffing — factors that may have contributed to the disaster. Senior members of Congress — including Oberstar and House Natural Resources Committee Chairman Nick J. Rahall II (D-W.Va.) — have begun looking into the inspection and staffing issues. The House Subcommittee on Coast Guard and Maritime Transportation will hold a hearing Thursday on foreign-flagged rigs in the Gulf of Mexico. Different types of rigs are classified differently, and the Marshall Islands assigned the Deepwater Horizon to a category that permitted lower staffing levels....
Some members of Congress are expressing concern about the Marshall Islands and other countries that outsource their inspection responsibilities to private companies. Coast Guard officials confirm that more rigorous inspection procedures apply to the relatively small number of rigs registered in the U.S. A foreign vessel will be reviewed by the Coast Guard, but the inspection is relatively cursory, relying on inspection reports prepared by outside firms that have been paid directly by the owners of the vessel...
The federal Minerals Management Service, which also has a role in overseeing offshore oil operations, deals only with issues "below the waterline" of the floating rig. It was not responsible for rig staffing, command structure or other above-water operations.

The Republic of the Marshall Islands (RMI) was a district of the Trust Territory of the Pacific Islands (TTPI) which the United States administered on behalf of the United Nations from 1947 until 1978. The RMI came into being as a sovereign country in 1979 and entered into a Compact of Free Association with the United States in 1986. ...Under the Financial Compact, the United States provides economic and financial aid and defends the RMI’s territorial integrity. In return, the RMI provides the Untied States with unlimited and exclusive access to its land and waterways for strategic purposes. The close ties between the United States and the RMI that go back to the end of World War II are also reflected in the fact that the RMI uses the U.S. dollar as its currency. Strategically, the RMI hosts the U.S. Army Kwajalein Atoll (USAKA) Reagan Missile Test Site, a key installation in the U.S. missile defense network.

Marshall Islands – United States relations
The Republic of the Marshall Islands is a sovereign nation in "free association" with the United States....after more than a decade of negotiation...Under the Compact, the United States has full authority and responsibility for security and defense of the Marshall Islands, and the Government of the Marshall Islands is obligated to refrain from taking actions that would be incompatible with these security and defense responsibilities.
The Department of Defense, under a subsidiary government-to-government agreement of the original Compact, has use of the lagoon and several islands on Kwajalein Atoll. The atoll consists of approximately 90 islets around the largest lagoon in the world. The original agreement allowed the United States continued use of the U.S. Army Kwajalein Atoll (USAKA) missile test range until 2016. An amendment to that agreement, extending U.S. rights until 2066 with an option until 2086, was negotiated in conjunction with the Amended Compact. Another major subsidiary agreement of the original Compact provides for settlement of all claims arising from the U.S. nuclear tests conducted at Bikini and Enewetak Atolls from 1946 to 1958. Under the terms of free association, more than 40 U.S. Government agencies such as the Federal Aviation Administration, U.S. Postal Service, the Small Business Administration, and the Federal Emergency Management Agency operate programs or render assistance to the Marshall Islands.

Goldman Sachs Dumps 44% of its BP Stock Weeks before Oil Rig Disaster

BP chief Tony Hayward sold shares weeks before oil spill
June 5, 2010
Tony Hayward cashed in about a third of his holding in the company one month before a well on the Deepwater Horizon rig burst, causing an environmental disaster. Mr Hayward, whose pay package is £4 million a year, then paid off the mortgage on his family’s mansion in Kent, which is estimated to be valued at more than £1.2 million. His decision ... means he avoided losing more than £423,000 when BP’s share price plunged after the oil spill began six weeks ago. Since he disposed of 223,288 shares on March 17, the company’s share price has fallen by 30 per cent

TNK-BP finance director James Owen resigns
The departure of James Owen has compounded the impression that TNK-BP, BP's Russian joint venture that is the third-largest producer of crude oil in the country, has been left increasingly rudderless after other management departures in recent weeks. Mr Owen tendered his resignation in a letter on Monday to Robert Dudley, the chief executive, who fled Russia on July 24 after AAR, the consortium of four Russian billionaire co-owners that is BP's partner in TNK-BP, tried to oust him from the company. Mr Dudley, who is fulfilling his role at an undisclosed location outside Russia.. Tony Hayward, BP's chief executive, met Mikhail Fridman, one of the AAR oligarchs, last week in Prague to discuss a possible peace deal that could include changes in TNK-BP's senior management... Some analysts interpreted Mr Owen's departure as being linked to these talks and a sign that BP and AAR could be edging closer to a deal.

BP finance chief sells more options
16 February 2010
BP finance director Dr Byron Grote has made his third six figure gain on option sales in three months

Bp Finance Plc: Private Company Information
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A small google sample of BP Finance & Oil Divisions:

"Jan 27 2010(Reuters) - BP Finance South Africa, a unit of TNK-BP , sold $1 billion of notes in two parts in the 144a private placement ..."

Annual Report and Accounts & Annual Review 2009 | Investor centre | "BP Annual Report and Accounts 2009 Detailed disclosure of our financial performance, including the Business Review, pdf (4314KB) ..." www.bp.com/extendedsectiongenericarticle.do?categoryId=9021605&contentId...

BP Global - Press - BTC Signs Project Finance Agreement. "The Azerbaijan Government and BTC Co, operated by BP, today hosted an official ... and Development (EBRD) and the International Finance Corporation (IFC), ..." www.bp.com/genericarticle.do?categoryId=2012968&contentId=2016340

BP Global
Press release 03 February 2004
The Azerbaijan Government and BTC Co, operated by BP, today hosted an official ceremony during which the final package of project finance documents was signed to finance BTC construction. The signing ceremony, which took place in the Gulustan Palace in Baku, marks the completion of agreements covering the third party financing for the pipeline project.
The BTC financing agreements were signed by representatives of the Governments of the Azerbaijan Republic, the Republic of Georgia and the Republic of Turkey and representatives from the BTC lender group in the presence of the President of the Azerbaijan Republic, H.E. Ilham Aliyev.
The financing package includes 208 finance documents, with over 17,000 signatures from 78 different parties, and it represents a major milestone in the implementation of the financing arrangements for the pipeline which will cost $2.95 billion to construct ($3.6 billion total project cost including linefill and loan interest during construction).
Approximately 30% of BTC costs are being funded by equity contributions, while the remaining 70% of the total is being provided in the form of financing by third parties. The BTC partners have already contributed $1 billion. The total debt committed is $2.6 billion thus completing the funding for the project.
The group that will provide loans, export credits and risk insurance to BTC comprises: the multilateral lending agencies: the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), the private sector arm of the World Bank the export credit agencies and political risk insurers of seven countries: the Japan Bank for International Co-operation (JBIC) and Nippon Export and Investment Insurance (NEXI) of Japan, the Export-Import Bank of the United States of America, the Export Credits Guarantee Department (ECGD) of the United Kingdom, the Overseas Private Investment Corporation (OPIC) of the United States, Compagnie Francaise pour le Commerce Exterieur (COFACE) of France, Euler Hermes Kreditversicherungs-AG (HERMES) of Germany and SACE S.p.A. – Servizi Assicurativi del Commercio Estero (SACE) of Italy
a syndicate of 15 commercial banks led by ABN AMRO, Citibank, Mizuho and Société Générale with Banca Intesa, BNP Paribas, Crédit Agricole Indosuez, Dexia, HypoVereinsbank, ING, KBC, Natexis Banques Populaires, San Paolo IMI, West LB and Royal Bank of Scotland loans provided by BP, Statoil, Total and ConocoPhillips, as senior sponsor lenders
Finalisation of the financing agreements comes after more than two years of far-reaching monitoring and scrutiny of the project’s environmental and social impact, as well as a thorough public consultation process. The loans are conditional on the project continuing to meet its stringent public commitments – which are subject to formal, quarterly audits by lenders...
The pipeline employs over 12,000 people along its entire route from Baku to Ceyhan. The project’s community investment programme is up and running in all three countries. Overall BTC together with the South Caucasus Pipeline (SCP) will spend some $30 million (including $5.5 million already awarded in Azerbaijan) on community and environmental investment between now and 2006 in Azerbaijan, Georgia and Turkey...

...the Mines Ministry has long been considered among Afghanistan's most corrupt government departments, and Western officials have repeatedly expressed reservations about the Afghan government awarding concessions for the country's major mineral deposits...
Afghanistan to Delay Awarding Concessions for Mineral Deposits
Afghanistan plans to delay awarding concessions for a major iron ore deposit and sizeable oil and gas reserves as part of a broader effort to stamp out corruption, the country's finance minister.Finance Minister Omar Zakhilwal said...to root out corruption and ensure Afghanistan gets the best deals when bringing in foreign firms to exploit its natural wealth.
The move by Afghanistan could upend the plans of Total SA, Swiss-based Addax Petroleum Corp. and Canada-based Nations Petroleum Co., all of which were among the seven finalists selected last year for oil and gas blocks in the country's northwest... Of particular concern, said Finance Minister Omar Zakhilwal in an interview Tuesday, is a major iron ore deposit in central Afghanistan that last year attracted bids from smaller Chinese and Indian companies. "We've put a hold onto to the bidding process; it will have to be re-bid," he said...
[T]he Mines Ministry has long been considered among Afghanistan's most corrupt government departments, and Western officials have repeatedly expressed reservations about the Afghan government awarding concessions for the country's major mineral deposits, fearful corrupt officials would hand contracts to bidders who pay the biggest bribes ...

.. polls show that most Americans do not think highly of either President Obama or BP when it comes to the spill....

Obama Vows End to ‘Cozy’ Oversight of Oil Industry
President Obama on Friday angrily assailed finger-pointing among the three companies involved in the oil spill in the Gulf of Mexico as a “ridiculous spectacle,” even as his own administration came under criticism for failing to do enough to prevent an environmental calamity.

u.s. democracy, not to be confused with 'corruption'
MMS Approved 27 Gulf Drilling Operations After BP Disaster
26 Were Exempted From Environmental Review, Including Two to BP
The Center for Biological Diversity
...as the BP drilling explosion which killed eleven people continues to gush hundreds of thousands of gallons of oil per day into the Gulf of Mexico, the U.S. Department of Interior’s Minerals Management Service (MMS) continued to exempt dangerous new drilling operations from environmental review. Twenty-seven new offshore drilling projects have been approved since April 20, 2010; twenty-six under the same environmental review exemption used to approve the disastrous BP drilling that is fouling the Gulf and its wildlife..."It is still exempting dangerous offshore drilling projects in the Gulf of Mexico from all environmental review...."...said Kierán Suckling, executive director of the Center for Biological Diversity, http://www.uruknet.de/?p=65883

U.S. Said to Allow Drilling Without Needed Permits
"The federal Minerals Management Service gave permission to BP and dozens of oil companies to drill in the Gulf of Mexico without required permits ..."

WSJ: Oil Rig Operator Had More Accidents After Massive Merger
Under the Bush administration, the Department of the Interior was literally handed over to the lobbyists (remember Steve Griles? He was convicted for lying to Congress in the Jack Abramoff case)...the brand-new Obama administration rubber-stamped a waiver to Deepwater Horizon..
The sinking of the Deepwater Horizon drilling rig, which triggered the spill spewing oil into the Gulf of Mexico, caught the energy world by surprise. The operator, Transocean Ltd., is a giant in the brave new world of drilling for oil in deep waters far offshore. It had been honored by regulators for its safety record. The very day of the blast on the rig, executives were aboard celebrating its seven straight years free of serious accidents. But a Wall Street Journal examination of Transocean's record paints a more equivocal picture [...]

Size of Oil Spill Vastly Underestimated, Scientists Say
The government and BP used improper measuring techniques, scientists and environmental groups say.

U.S. oil drilling regulator agency ignored experts' red flags on environmental risks:
The federal agency responsible for regulating U.S. offshore oil drilling repeatedly ignored warnings from scientists about environmental risks in its push to approve energy exploration activities quickly, according to numerous documents and interviews. http://www.washingtonpost.com/wp-dyn/content/article/2010/05/24/AR201005...

BP’s Ties to Agency Are Long and Complex
...Three years ago, the national laboratory then headed by Steven Chu received the bulk of a $500 million grant from... BP to develop alternative energy sources through a new Energy Biosciences Institute. Dr. Chu received the grant from BP’s chief scientist at the time, Steven E. Koonin, a fellow theoretical physicist... selected Lawrence Berkeley National Laboratory at the University of California, Berkeley. Today, Dr. Chu, President Obama’s energy secretary, spent Tuesday in Houston working with BP officials...Dr. Koonin, who followed Dr. Chu to the Energy Department now serves as under secretary of energy for science... May 12, Mr. Obama sent Dr. Chu to BP’s command center in Houston to meet with top engineers and scientists. After meeting with BP, Dr. Chu told reporters that he believed that “things are looking up,” and that he felt “more comfortable than I was a week ago” with progress toward containment. Along with Interior Secretary Ken Salazar, whose department has jurisdiction over the spill, Dr. Chu appeared beside Mr. Obama in the Rose Garden the next day [May 13] as Mr. Obama angrily assailed the three companies involved in the oil spill...

Feds Let BP Avoid Filing Blowout Plan For Gulf Rig
Petrochemical giant BP didn't file a plan to specifically handle a major oil spill from an uncontrolled blowout at its Deepwater Horizon project because the federal agency that regulates offshore rigs changed its rules two years ago to exempt certain projects in the central Gulf region, according to an Associated Press review of official records. The Minerals Management Service, an arm of the Interior Department known for its cozy relationship with major oil companies, says it issued the rule relief because some of the
industrywide mandates weren't practical for all of the exploratory and production projects operating in the Gulf region.

BP used cheaper, riskier drill plan
Beset by daily costs of perhaps $1 million, oil giant used design that increases danger by 'tenfold'...had BP used a liner and casing, it would have taken nearly a week longer for the company to finish the well with rig costs running at $533,000 a day and additional personnel and equipment costs that might have run the tab up to $1 million daily.

Salazar Formally Orders MMS Break-Up
Dow Jones Newswires|Wednesday, May 19, 2010
The Minerals Management Service / MMS collects as much as $13 billion a year in royalties from energy companies, making it the second only to the Internal Revenue Service some years as a source of revenue for the federal treasury. Government watchdogs have said the agency's dual missions--to collect royalties and enforce safety and environmental regulations--are at odds, and some have said that it reliance on fees levied on the industry compromises its independence. Salazar indicated in his remarks that the reorganization is at least partly aimed at addressing perceived conflicts of interest. "It's important we have a government that avoids even the perception of potential conflicts," he said.Salazar's aides say he has the legal authority to carry out the restructuring on his own...Under the reorganization, the MMS will see its major functions split into three different bureaus, all within the Department of Interior.... MMS Chief Resigns May 27 Interior Secretary Ken Salazar [her boss] said Thursday at a House Appropriations Committee hearing on the Gulf of Mexico oil spill she resigned "of her own volition."

BP Hires GWB's Spokesperson and DOE PR Director also Dick Cheney's Former Campaign Press Secretary
http://www.prwatch.org/node/9109 June 1, 2010
BP has hired former Vice President Dick Cheney's campaign press secretary, Anne Womack-Kolton, to head its American public relations efforts. Womack is a former employee of the PR firm APCO Worldwide, known for its work on behalf of the tobacco industry. Womack also served as a White House spokesperson, defending Bush's White House Office Of Faith-Based Initiatives. In announcing Womack-Kolton's hiring, BP only mentioned she had been director of public affairs for the Department of Energy (DOE) under George W. Bush

BP's Success Continues Despite Tragedy
Analysis, May 21, 2010
Rigzone.com: "Your Gateway to the Oil and Gas Industry" providing you with industry news and information...dynamic, original content, resources that not found anywhere else.
BP, one of six supermajors, is the third largest oil company in the world. The company is also the leading operator in the deepwater GOM, producing over 400,000 b/d from operated fields including Thunder Horse, Atlantis, and Mad Dog, and holds interests in non-operated fields including Mars and Ursa. BP also holds the largest number of leases in the deepwater GOM with more than 650 leases in waters deeper than 1,250 ft.
BP produced 4 MMboe/d in 2009, an increase of 4% on 2008, and its 17th consecutive year of increasing reserves. BP intends to start up a total of 42 new major projects between 2010 and 2015, which are expected to contribute about 1 MMbbl in total production by 2015, more than offsetting the decline from currently producing fields.
The supermajor also announced its Q1 2010 replacement cost profit was $5,598 million, compared with $2,387 million a year ago, which is an increase of 135%...
However, BP reported that production for Q1 2010 was 4,010 Mboe/d, which was broadly flat compared to Q1 2009, reflecting continued strong operational performance. The company previously stated that it expects production in 2010 to be slightly lower than in 2009 due to oil prices and its impact of PSAs and OPEC quota restrictions. BP also indicted in its quarterly report that Q2 2010 is expected to experience a normal seasonal turnaround effect of about 100 Mboe/d. These turnaround activities are planned for some of BP's higher-margin areas including the North Sea and the Gulf of Mexico. This will impact costs and margins as well as volumes.
Production, according to Group chief executive Tony Hayward, is expected to pick up again in 2011. There's no telling what impact the April 20, 2010, blow-out in the Gulf of Mexico will have on BP's future numbers.

"...there is no need right now that the U.S. cannot meet..."
U.S. not accepting foreign help on oil spill
By Josh Rogin May 6, 2010, thecable.foreignpolicy.com/posts/2010/05/06/us_not_accepting_foreign_help_on_oil_spill
When State Department spokesman P.J. Crowley refused to tell reporters which countries have offered assistance to help respond to the BP oil spill, the State Department press corps was flabbergasted....They pressed Crowley, but he refused to budge. Then they mentioned Iran's offer of assistance, through its National Iranian Drilling Company. Crowley said there was no Iranian offer of assistance, at least in any official capacity.
Late Wednesday evening, the State Department emailed reporters identifying the 13 entities that had offered the U.S. oil spill assistance. They were the governments of Canada, Croatia, France, Germany, Ireland, Mexico, the Netherlands, Norway, Romania, Republic of Korea, Spain, Sweden, the United Kingdom, and the United Nations. "These offers include experts in various aspects of oil spill impacts, research and technical expertise, booms, chemical oil dispersants, oil pumps, skimmers, and wildlife treatment," the email read. "While there is no need right now that the U.S. cannot meet, the U.S. Coast Guard is assessing these offers of assistance to see if there will be something which we will need in the near future."
The Obama administration has been relentless in its messaging that it is doing everything possible to aggressively respond to the oil spill. But for the record, the current message to foreign governments is: Thanks but no thanks, we've got it covered. A State Department official, speaking on background, said that the decision not to initially release the names of offering countries came directly from the State Department leadership.

Despite Moratorium, Drilling Projects Move Ahead
Mr. Obama announced on May 14 a moratorium on drilling new wells and the granting of environmental waivers “It seems as if permits were too often issued based on little more than assurances of safety from the oil companies,” Mr. Obama said. “That cannot and will not happen anymore. We’re also closing the loophole that has allowed some oil companies to bypass some critical environmental reviews,” he added in reference to the environmental waivers.
But records indicated that regulators continued granting the environmental waivers and permits for types of work like that occurring on the Deepwater Horizon.
In the days since President Obama announced a moratorium on permits for drilling new offshore oil wells and a halt to a controversial type of environmental waiver that was given to the Deepwater Horizon rig, at least seven new permits for various types of drilling and five environmental waivers have been granted, according to records.
The records also indicate that since the April 20 explosion on the rig, federal regulators have granted at least 19 environmental waivers for gulf drilling projects and at least 17 drilling permits, most of which were for types of work like that on the Deepwater Horizon shortly before it exploded, pouring a ceaseless current of oil into the Gulf of Mexico...
At least six of the drilling projects that have been given waivers in the past four weeks are for waters that are deeper — and therefore more difficult and dangerous — than where Deepwater Horizon was operating. While that rig, which was drilling at a depth just shy of 5,000 feet, was classified as a deep-water operation, many of the wells in the six projects are classified as “ultra” deep water, including four new wells at over 9,100 feet...
Asked about the permits and waivers, officials at the Department of the Interior and the Minerals Management Service, which regulates drilling, pointed to public statements by Interior Secretary Ken Salazar, reiterating that the agency had no intention of stopping all new oil and gas production in the gulf...
Even before the Deepwater Horizon disaster, the use of environmental waivers was a source of concern. In September 2009, the Government Accountability Office released a report concluding that the waivers were being illegally granted to onshore drilling projects.
This month, the Interior Department announced plans to restrict the use of the waivers onshore, not offshore. It also began a joint investigation of the offshore waiver process with the Council on Environmental Quality, an environmental arm of the White House. The investigation, however, is likely to take months, and in the meantime the waivers are continuing to be issued. There is also a 60-day statute of limitations on contesting the waivers, which reduces the chances that they will be reversed if problems are found with the projects or the Obama administration’s review finds fault in the exemption process....

capitalist crimes protected by the state: 'lapses'
BP, a History of Spills and Safety Lapses
After BP’s Texas City, Tex., refinery blew up in 2005, killing 15 workers, the company vowed to address the safety shortfalls that caused the blast. The next year, when a badly maintained oil pipeline ruptured and spilled 200,000 gallons of crude oil over Alaska’s North Slope, the oil giant once again promised to clean up its act.In 2007, when Tony Hayward took over as chief executive, BP settled a series of criminal charges, including some related to Texas City, and agreed to pay $370 million in fines. “Our operations failed to meet our own standards and the requirements of the law,” the company said then, pledging to improve its “risk management.”...Now BP is in the spotlight because of the April 20 explosion of the Deepwater Horizon, which killed 11 people and continues to spew oil into the ocean. It is too early to say what caused the explosion. Other companies were also involved, including Transocean, which owned and operated the drilling rig, and Halliburton, which had worked on the well a day before the explosion. BP has repeatedly asserted that Transocean was solely responsible for the accident...
BP, the nation’s biggest oil and gas producer, has a worse health, environment and safety record than many other major oil companies, according to Yulia Reuter, the head of the energy research team at RiskMetrics, a consulting group that assigns scores to companies based on their performance in various categories, including safety....
BP said it was in full compliance and had contested the OSHA findings at Texas City and Toledo. Since the 2005 blast in Texas, BP has invested $1 billion to improve the refinery...
As for its Atlantis offshore platform, BP said it had found no evidence to support a whistle-blower’s allegations that it was operating without all the right paperwork. A spokesman for the company said, “Platform personnel have access to the information they need for the safe operation of the facility.” The identity of the whistle-blower, and the exact nature of the person’s evidence, have not been made public. The federal Minerals Management Service is conducting the investigation....between 1996 and 2009, according to the Minerals Management Service, BP-operated platforms spilled a total of about 7,000 barrels of oil — 14 percent of the amount spilled in the Gulf by any company. In that period, BP accounted for 15 percent of the oil production in the Gulf. Now, the government says, nearly that much oil is pouring out every day from the current spill.

Federal Regulators Deferred to Oil Industry on Rig Safety
Federal regulators warned offshore rig operators more than a decade ago that they needed to install backup systems to control the giant undersea valves known as blowout preventers, used to cut off the flow of oil from a well in an emergency. The warnings were repeated in 2004 and 2009. Yet the Minerals Management Service, the Interior Department agency charged both with regulating the oil industry and collecting royalties from it, never took steps to address the issue comprehensively, relying instead on industry assurances that it was on top of the problem, a review of documents shows. In the intervening years, numerous blowout preventers and their control systems have failed, though none as catastrophically as those on the well the Deepwater Horizon drilling rig was preparing when it blew up on April 20, leaving tens of thousands of gallons of oil a day spewing into the Gulf of Mexico. Agency records show that from 2001 to 2007, there were 1,443 serious drilling accidents in offshore operations, leading to 41 deaths, 302 injuries and 356 oil spills. Yet the federal agency continues to allow the industry largely to police itself.

new 'discoveries' just now available
Oil spill investigators find critical problems in blowout preventer
May 13, 2010
A House energy panel investigation has found that the blowout preventer that failed to stop a huge oil spill in the Gulf of Mexico had a dead battery in its control pod, leaks in its hydraulic system, a "useless" test version of a key component and a cutting tool that wasn't strong enough to shear through steel joints in the well pipe and stop the flow of oil. In a devastating review of the blowout preventer, which BP said was supposed to be "fail-safe," Rep. Bart Stupak (D-Mich.), chairman of the House Energy and Commerce Committee's subcommittee on oversight, said Wednesday that documents and interviews show that the device was anything but... Stupak said committee investigators had uncovered a document prepared in 2001 by Transocean, the drilling rig operator, that said there were 260 "failure modes" that could require removal of the blowout preventer...Committee Chairman Henry A. Waxman (D-Calif.), who said the committee collected more than 100,000 pages of documents, focused on the cementing job by Halliburton. He said statements and documents indicated a test performed on the work about five or six hours before the explosion showed other dangerous flaws...
While Congress probes the accident, a board of federal officials is also investigating. In a hearing in a hotel ballroom near New Orleans, Michael Saucier, a regional supervisor for the Minerals Management Service, said the beleaguered federal agency that oversees offshore drilling learned in a 2004 study that fail-safe systems designed to shear through steel pipes could fail in some circumstances. But he said MMS did not check whether rigs were avoiding those circumstances....Coast Guard Capt. Hung Nguyen, co-chair of the investigating board raised the 2004 study that found that blowout preventers did not have the power to cut ultra-strong pipe joints. Nguyem also asked Saucier how the MMS ensures that blowout preventers function. Saucier said for that, the government relies heavily on industry designs and oil company tests. "Manufactured by industry, installed by industry, with no government witnessing oversight of the installation or the construction, is that correct?" Nguyen asked. "That would be correct," Saucier said.

BP Refuses EPA Order to Switch to Less-Toxic Oil Dispersant

Obama administration defends BP response to oil spill disaster
By Andre Damon, May 25, 2010
BP continued spraying the highly-toxic Corexit 9500 dispersant onto the Gulf of Mexico, despite a government order instructing it to stop by Saturday. BP has refused to comply with a separate demand issued by the government that it turn over all scientific data regarding the spill in its possession. "BP basically told the EPA 'no’ in very certain terms," said Rick Steiner, an oil spill expert and marine conservationist. Steiner said he found numerous inaccuracies in BP’s response to a government demand that it provide recommendations for alternative dispersants, including the omission of one chemical, JD-2000, which may be less toxic than all the others on the list.
When asked how the government will respond to BP’s defiance, Allen defended BP by saying its chosen dispersant is "an order of magnitude" less toxic than the oil itself.
"This bypasses the real issue, namely that dispersants actually make oil more toxic," said Steiner. The higher toxicity of dispersed oil is backed up by numerous studies, including one that concluded unequivocally that "dispersed oils were more toxic than crude oils."
"Despite everything, the Obama administration is saying: 'You’re doing a heck of a job Brownie!’ It’s disgusting," said Steiner, invoking the infamous praise given by George W. Bush to his Federal Emergency Management Agency head, Michael Brown, for the government’s catastrophic response to Hurricane Katrina in 2005...
[Coast Guard Commandant Thad] Allen reiterated the claim, repeated continuously since the April 20 explosion, that regulators had no way to foresee the failure of the Deepwater Horizon blowout preventer....again, false, as demonstrated by a 2004 study by the Minerals Management Service, which found that most blowout preventers failed at deep-sea drill sites.

Pentagon to buttress U.S. policies on the Internet
Within the "irregular warfare" framework, House lawmakers added $20 million added to the 2011 defense budget (2011 Defense Authorization Act) to extremists’ use of the Internet will pay for "emerging areas of research", to be conducted by the Pentagon, into better ways of stemming the effective tide of criticisms against U.S. policies on the internet with a view to developing a successful "counter narrative".

Deepwater Horizon survivors allege they were kept in seclusion after April 20 rig explosion, coerced into signing legal waivers

BP Buys 'Oil' Search Terms to Redirect Users to Official Company Website
June 5, 2010
BP, the very company responsible for the oil spill that is already the worst in U.S. history, has purchased several phrases on search engines such as Google and Yahoo so that the first result that shows up directs information seekers to the company's official website. A simple Google search of "oil spill" turns up several thousand news results, but the first link, highlighted at the very top of the page, is from BP. "Learn more about how BP is helping," the link's tagline reads. A spokesman for the company confirmed to ABC News that it had, in fact, bought these search terms to make information on the spill more accessible to the public

Chief Mechanic's and Captain's smoking gun testimony reveal why at least two
BP men on Deepwater Horizon rig won't testify
May 26, 2010,
One of BP's company men on the Deepwater Horizon when it exploded, Robert Kaluza, declined to testify in the joint U.S. Coast Guard and Minerals Management Services hearings before the investigative panel in Kenner, citing his Fifth Amendment right not to incriminate himself, the Coast Guard said.
Donald Vidrine of BP also was scheduled to testify Thursday, but he has withdrawn, citing illness, the Coast Guard said...
In addition to periodic inspections by the U.S. Minerals Management Service, Deepwater Horizon's flag state, Marshall Islands, hires its own inspection organization to audit activities and systems on the rig. The American Bureau of Shipping performs those surveys, and chief surveyor John David Forsyth testified that his agency last inspected the rig's failed blowout preventer in 2005, before it was installed as the final fail-safe against a well blowout. Asked by BP's lawyer if the fact that there were no further certifications of the blowout preventer came at Transocean's request, Forsyth said, "Yes, it was."...

Chief Mechanic Doug Brown's Testimony
The chief mechanic on the Deepwater Horizon testified Wednesday that he was at a planning meeting 11 hours before the rig exploded at which the BP company man overruled drillers from rig owner Transocean and insisted on displacing protective drilling mud from the riser that connected the rig to the oil well. "I recall a skirmish between the company man, the OIM (offshore installation manager), the tool-pusher and the driller," said Doug Brown, one of 115 rig workers who survived the April 20 disaster. "The driller was outlining what would be taking place, whereupon the company man stood up and said, 'No, we'll be having some changes to that.' It had to do with displacing the riser for later on. The OIM, tool-pusher and driller disagreed with that, but the company man said, 'Well, this is how it's gonna be'...

Capt. Carl Smith's testimony
Before Brown came to the witness stand at the hearings in Kenner, a ship captain with 15 years of drilling experience told the joint investigative panel that he doesn't know why a rig would displace the protective column of heavy mud with light seawater before closing off a well.
Smith testified that there is an inherent conflict on any drilling rig between the company that's leasing the rig and oilfield and the drilling operators... the "company man" represents a firm that leases the rig and often pays $500,000 a day to drill for the oil, so is concerned about speed and cost. The crew is generally more concerned about safety and controlling the well...

Why Is BP Controlling Louisiana’s Cops?
Mother Jones reporter Mac McClelland spent two days recently trying to get out to the Elmer’s Island Wildlife Refuge, “stymied at every turn” by law enforcement officials who claim they’re getting their marching orders from BP. http://washingtonindependent.com/85648/why-is-bp-controlling-louisianas-...

Sen. Kerry Praises Oil Industry for Their Support
Care2 reports, "A piece of machinery costing .004 percent of BP's 2009 profits might have prevented the Gulf of Mexico oil spill that is currently ...
www.care2.com/.../full-magnitude-of-gulf-oil-spill-wont-be-known-for-yea... /

BP's profits 3.6 billion in 2010 first quarter
BP's Fourth Quarter 2009 Profits Up 70%
February 02, 2010, http://www.rigzone.com/news/article.asp?a_id=86719&hmpn=1
During the year the company gained access to significant new resource opportunities such as the Rumaila oilfield in Iraq -- one of the great oil fields of the world -- coalbed methane in Indonesia and onshore gas in Jordan, as well as strengthening its position in existing core areas including the deepwater Gulf of Mexico and Egypt's Nile Delta. BP's track record of exploration success also continued with the ultra-deep giant Tiber discovery and confirmation of the Mad Dog South extension in the Gulf of Mexico, and three further discoveries in block 31 offshore Angola..."We will remain focussed on further reducing costs and further increasing availability in 2010," said Hayward...."2009 has been one of the best years for BP and its shareholders since the merger with Amoco. But we are not resting on our laurels. There's a lot more to be done. BP insists 45 per cent profits fall is 'very good' - Business News ...Feb 3, 2010 ... www.independent.co.uk