Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: koan who wrote (76545)	5/28/2010 11:06:44 PM
From: stockman_scott	Respond to of 149317

BP Credibility Questions Grow as U.S. Lawmakers Press Inquiry By Alison Fitzgerald and Lorraine Woellert May 28 (Bloomberg) -- BP Plc faces growing questions about its account of the explosion that set off a record oil spill as lawmakers said the company may not be telling all it knows about how the disaster happened. “BP’s investigation appears to omit key issues,” including decisions to use a type of cement casing that may have let gas escape to the wellhead, said Representative Henry Waxman of California, chairman of the U.S. House Energy and Commerce Committee, at a hearing yesterday. The congressional inquiry adds to doubts voiced in Washington about BP’s credibility as the London-based company works to assure federal officials it can shut down the well that spewed oil into the Gulf of Mexico since the April 20 explosion and will foot the bills to clean up polluted wetlands and beaches. “We were sold a bill of goods by BP and other big oil companies that we had nothing to worry about in terms of a spill or an ecological disaster,” Representative Eliot Engel, a New York Democrat who serves on Waxman’s panel, said in an interview yesterday. “We found out that was all baloney, and then once there was a problem, they had no real plan to clean it up.” Waxman and Representative Bart Stupak, a Michigan Democrat and chairman of the committee’s oversight panel, sent BP a letter yesterday requesting more information about a briefing the company prepared for committee staff on May 25. The lawmakers asked about BP actions that they say may have contributed to the well’s failure, such as limits on the well’s cleaning and the choice of casing. BP said a flaw with the casing was a critical event before the explosion. The casing failure allowed hydrocarbons to escape from the well. Emergency systems failed to stop the flow of gas, which ignited and caused the riser to collapse. ‘Safe, Reliable’ “Safe, reliable operations is our No. 1; it’s been Tony’s No. 1 since he got here,” said BP spokesman Jon Pack, referring to Chief Executive Officer Tony Hayward. “We obviously would not comment on things under investigation, under several investigations.” Waxman and Stupak asked to see all documents about BP’s strategy for the well’s cement casing, such as the decision to use a single casing line from the sea floor to the oil reservoir. They also asked for information related to circulating drilling mud through the well on April 19, the day before the rig exploded. It’s possible BP’s “internal investigation isn’t examining the consequences of BP’s own decisions and conduct,” Waxman said in the letter. He demanded the documents by June 3. Contradictory Responses Some of BP’s latest responses to the Energy and Commerce Committee “contradict several of the other things they have said in the past” about “what happened before the blowout,” Waxman told reporters. BP, Transocean Ltd., which owned the Deepwater Horizon rig leased to BP, and Halliburton Co., the contractor involved in cementing the well, have pointed at each other in assigning blame for the disaster. An investigator for BP told staff of Waxman’s committee that rig operators erred by releasing pressure in a “kill line” while pressure in a drill pipe remained at 1,400 pounds per square inch. A Transocean official told a May 26 hearing conducted by the U.S. Coast Guard and the Minerals Management Service that company managers disagreed with BP officials on how to proceed with work hours before the explosion, and then “reluctantly” agreed to go ahead. Federal officials said yesterday the leaking well may have gushed 12,000 to 19,000 barrels a day, more than the company has estimated and more than the Exxon Valdez dumped into Alaska’s Prince William Sound in 1989. Stopping the Flow BP said it made progress yesterday in stopping the flow of oil from the well after pumping mud-like drilling fluid into it. The spill has cost BP a total of $760 million, or about $22 million a day, the company said May 24. BP’s average daily profit last year was $45 million a day, according to data compiled by Bloomberg. “Their interest may be to minimize the damage and, to the extent that they have better information than anybody else, to not be fully forthcoming,” President Barack Obama said at a press conference yesterday. “So my attitude is we have to verify whatever they have to say about the damage.” Obama extended yesterday by six months a moratorium on new deep-water drilling permits that began after oil started to spill from BP’s well. He also suspended operations at all 33 exploratory wells being drilled in the Gulf, planned drilling by Royal Dutch Shell Plc of exploratory wells in the Arctic off Alaska, and a proposal to drill off the coast of Virginia. BP’s exploration plan for the newly discovered Tiber field, estimated to have more than 3 billion barrels deep under the Gulf, is on hold. To contact the reporters on this story: Alison Fitzgerald in Washington at afitzgerald2@bloomberg.net; Lorraine Woellert in Washington at lwoellert@bloomberg.net; Last Updated: May 28, 2010 00:00 EDT