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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

BP’s “culture of corporate recklessness”

 

There won’t be a news brief tomorrow, Thursday, 6 September 2012.

The story of the day is a commodities investigation roundhouse kick involving Shell, BP and Gazprom.

The US Department of Justice is charging BP with gross negligence and wilful misconduct in the case of the 2010 Deepwater Horizon disaster, upon which BP’s shares fell 3.95%. If gross negligence is proven, the fine could be up to $21bn according to the US Clean Water Act. BP, however, is only prepared to pay $15bn in total. The case is being heard in New Orleans, for the view, with unnamed lawyers of the Department of Justice saying the following in a leaked memo:

The behaviour, words and actions of these BP executives would not be tolerated in a middling size company manufacturing dry goods for sale in a suburban mall. Yet they were condoned in a corporation engaged in an activity [deepwater drilling] that no less a witness than Tony Hayward [former BP chief executive] himself described as comparable to exploring outer space.

No hard feelings.

But really, Deepwater Horizon ruined the fun for everybody. Shell, which has spent the past seven years in preparations of oil drilling in the Arctic sea north-west of Alaska, struggled so much with government licenses and environmental groups that it led many other companies to turn their back to those waters. Even more hilarious, however, is that the license agreement that Shell ended up securing, allows the Noble Discovery Rig to drill 1,400ft deep. That is about 4,000ft ABOVE the predicted oil reservoir. Hmmm.

Lastly, the European Commission has launched an investigation into Russian state-owned Gazprom. The investigation regards market barriers that keep countries from diversifying their gas suppliesAccording to WSJ:

EU said the probe will look at Gazprom’s behavior in eight countries. Russia supplies 36% of the EU’s natural gas, but it is the effective sole supplier to Bulgaria, Estonia, Latvia, Lithuania and Slovakia. According to EU data, it also supplies 82% of Poland’s gas, 83% of Hungary’s and 69% of the Czech Republic’s.

But no worries, EU officials said there are no problems with Russian gas deliveries, as this isn’t likely to piss anyone off at all.

Re: yesterday’s US manufacturing data:
WSJ Real Time Economics shared a chart mostly composed of the words ‘expanding slower’ and ‘contracting faster’… read article

In Germany, where both the government and most banks are vehemently against a European banking union that would establish the ECB as a central monitor of all European banks, Juergen Fitschen, Co-CEO of Deutsche Bank has spoken out in favor of such a union, causing quite some turmoil at today’s Handelsblatt banking conference in Frankfurt. read article

Otherwise, Australia’s Q2 GDP came in at 0.6%, undercutting the expected [massive] 0.7% and European retail sales dropped by 0.2% from June, to -0.1%. This can mostly be attributed to the poor state of consumer confidence, which is worsened by increasing energy prices (hello, EU! (see above)) read article

So long.

 

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3 Responses

  1. princess1960 says:

    hey NY..or LONDON..oil prices after up never go down ..will go up ..with out limit ..bad days….thank you

  2. […] the EU initiated an investigation into Gazprom‘s market position in Eastern and Central European countries, the Kremlin has now taken […]

  3. […] domination angle to it. But for the EU, the picture looks pretty different. Just minutes after they tried to get into the books of Gazprom (the Russians? Really?), they now want to screw the Chinese over. Something tells me Europe is […]

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