Yahoo.com : For BP, a $20 billion drop in a very large bucket

[killerbee99]

For all those crying about " shakedown " or BP will file for bankruptcy, this is for you (TWA, NavyDave)

http://news.yahoo.com/s/ap/20100617/ap_on_bi_ge/us_bp_s_future;_ylt=AqjJUUpKBJrrPt.oQRyB218Eq594;_ylu=X3oDMTMzajIwMmplBGFzc2V0A2FwLzIwMTAwNjE3L3VzX2JwX3NfZnV0dXJlBGNjb2RlA21vc3Rwb3B1bGFyBGNwb3MDMwRwb3MDMwRzZWMDeW5fdG9wX3N0b3JpZXMEc2xrA2ZvcmJwYTIwYmlsbA--

NEW YORK – BP holds enough oil in its reserves to single-handedly supply the United States for two years. It has little debt for a company of its size and makes more money than Apple and Google combined.

So when the White House arm-twisted its executives into setting aside $20 billion for the Gulf oil spill, investors weren't worried it would bankrupt BP. They barely batted an eye.

"The U.S. government will become insolvent before BP does," said Bruce Lanni, a stock analyst with Nollenberg Capital Partners.

Sure, BP stock has crumpled in half in a matter of weeks. Creditors are demanding ever higher interest. But this time it's not some inscrutable, high-flying Wall Street bank in trouble.

BP posted $17 billion in profit from its vast operations around the globe last year, compared with $5.7 billion for Apple and $6.5 billion for Google. More important, in the past three years the company generated $91 billion in cash flow from operations.

It's not highly leveraged with debt, as banks were during the financial crisis. And it has 18 billion barrels of oil in proven reserves, twice what the U.S. consumes every year.

BP has spent about $1.8 billion on the spill so far, but that's the first drop in a very large bucket. If BP faces criminal charges, for instance, it could end up having to pay tens of billions in legal costs alone

[BadKarma]

This whole congressional witch hunt seems like total overkill, BP has already pledged to fix this situation, only thing left to do is make sure they follow through.

[Chopper Dave]

This whole congressional witch hunt seems like total overkill, BP has already pledged to fix this situation, only thing left to do is make sure they follow through.

Ah, I remember the good old days, back when I believed in Congressional oversight and Santa Claus.

BP must pay dearly. An official investigation with a Special Prosecutor should commence. Criminal negligence charges should be filed. They should be made to first reimburse the government for any taxpayer money laid out on their end, then match that in punitive damages. Then they should have to put all the unemployed masses affected by the spill on the equivalent of the standard BP pension and healthcare plans for a certain amount of time.

They need to be hit just hard enough so that they're not bankrupted, and not a penny less, both to punish them and to pay back the American public for the damage to a vital region of our country. And if Cameron or any blokes on the other side of the pond have a problem with it, we should dump a bajillion gallons of crude into the English Channel and the Irish Sea and see how they like it.

[twa]

Crying is for Libs Junior.

[Fergasun]

Really, is the US Government going to pay back for all the negligence they had as well?

[twa]

Really, is the US Government going to pay back for all the negligence they had as well?

Yes they intend on punishing themselves by adding another layer of ineffective bureaucracy....and raising your taxes;)

Added

Riddle me this....Since BP is so fiscally sound and has already committed to paying beyond what is mandated why this escrow was created?

Could it simply be a political stunt to appear to be doing something constructive?....Naaaaa

[JimboDaMan]

Really, is the US Government going to pay back for all the negligence they had as well?

I believe it would only be fair for the government to pay for the wells it has blown up, and have BP pay for the wells BP has blown up. Oh wait, that's what already is happening.

[JimboDaMan]

Yes they intend on punishing themselves by adding another layer of ineffective bureaucracy....and raising your taxes;)

Added

Riddle me this....Since BP is so fiscally sound and has already committed to paying beyond what is mandated why this escrow was created?

Could it simply be a political stunt to appear to be doing something constructive?....Naaaaa

Care to describe what happened with Exxon Valdez payments?

[twa]

Care to describe what happened with Exxon Valdez payments?

Care to explain the resulting oil act?

Law specifically tailored to this kind of event...you do remember laws don't ya?

While you are at it try looking up precedent in US law regarding economic claims

[Teller]

I believe it would only be fair for the government to pay for the wells it has blown up, and have BP pay for the wells BP has blown up. Oh wait, that's what already is happening.

"The American people should know that from the moment this disaster began, the federal government has been in charge of the response effort." -- Barack Obama

http://blogs.suntimes.com/sweet/2010/05/obama_on_bp_oil_spill_im_fully.html

Well, if we want to play those games, the federal government has failed much more drastically than BP. If the feds are in charge of the response effort, as the president says, their failure has been infinitely more epic.

[Hubbs]

Who the hell was saying BP would go bankrupt because of this? The made $6 billion in profit last quarter. $20 billion is about ten months.

[Teller]

Who the hell was saying BP would go bankrupt because of this? The made $6 billion in profit last quarter. $20 billion is about ten months.

I'm more concerned with the notion that we should bankrupt every company that makes a mistake. Granted, environmentally, this mistake appears to be more costly than any in our history. But personally, I will wait and see exactly what negligence, or deliberate subversion of law exists, and make a determination of what I think the punishment should be then.

But as long as we're going after those "in charge" like Hayworth, we should consider the president's own words that I posted earlier.

[Hubbs]

I'm more concerned with the notion that we should bankrupt every company that makes a mistake.

I'm pretty sure nobody was saying that, either. :pfft:

[Destino]

This is about accountability and it's simple. You broke it you bought it. The fishermen in the gulf didn't see a penny of the upside and they shouldn't absorb the cost of the down side. BP has to pay for the damages they created. All of them.

If you don't hold companies completely accountable they'll have no motivation to change the way they operate.

[Teller]

I'm pretty sure nobody was saying that, either. :pfft:

I hope not.

This is about accountability and it's simple. You broke it you bought it. The fishermen in the gulf didn't see a penny of the upside and they shouldn't absorb the cost of the down side. BP has to pay for the damages they created. All of them.

If you don't hold companies completely accountable they'll have no motivation to change the way they operate.

I agree completely. Actual damages, and punitive damages are fine, and they should be signficant. Trying to destroy this company, unless it's proven they willfully ignored existing regulations, leading to this disaster, is not.

Personally, I believe they weren't the only ones oblivious to this possibility. Weeks before this happened, the president announced a brand new expansion of off-shore drilling. If he had reason to believe something like this was likely, I'm certain he would not have gone forward.