BP and Congress

Without wishing to be unkind, both the appearance of the Chairman of BP outside the White House talking about the ‘small people’ of America and the appearance of the Chief Executive before the Congressional committee have been complete and utter public relations disasters, which will further inflame both public and political opinion in the US in the charged atmosphere of a mid- term election campaign and an oil spill disaster which has become the biggest American trauma since 9/11. These two men were very badly advised indeed of what was expected of them and whatever counselling they received from lawyers and media wizards was as hapless as their disaster planning.

The position of BP as a corporation is catastrophic. It cannot stop the leak yet and it cannot explain itself to anxious millions. A fuming Administration goaded by an angry country aghast at the blundering of the oil giant’s response to the crisis and the suffering of the Gulf region, has the company by the throat. The bills are becoming eye watering. A $20 billion dollar fund not capped (and no chance of a cap now), billions of dollars in law suits with no clear line on the scale of the damage to environment, people or commerce, and fines which can range from $1000 to $ 4000 per barrel per day leaked, now known to amount to some 60,000 for each day of the near sixty thus far. 

There is now an increased risk of Chapter 11 or, if Congress becomes much angrier, of BP’s U.S assets being impounded. Moreover on the political front Cameron’s visit to the President in July when much of importance is on the agenda, there is now a certainty (unless the leak is stopped which seems unlikely by then) that the disaster will dominate the media coverage in America, sucking Cameron into the drama. The Government of our closest ally has the biggest calamity since 9/11 on its hands, what is the British Government doing to help etc?

In this developing crisis things are getting worse not better. Shareholders should be very worried. Their company leadership does not appear to be up to this unprecedented situation. To change in the middle of it would surely be rash. Yet such is the scale of events, something more is required. What happens for instance if the relief well blows? Is there a plan?