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Posts Tagged ‘Gulf of Mexico’

Another BP CDS Blowout Today?

In Financial Markets, High Frequency Trading, Law & Regulations, National Economic Politics, Natural science, Technology, Views, commentaries and opinions on 29.10.10 at 02:43

Reports stemming from the presidential commission investigating the Gulf of Mexico oil spill indicate that Halliburton and BP were aware of flaws in the cement used to seal the well’s bottom. Halliburton’s CDS spreads started to move  Thursday – what will happen on Friday?

“The distribution of the burden, unlike hardened cement, is still fluid.”

Otis Casey



Halliburton and BP may have been aware of flaws in the cement used to seal the well’s bottom, according to an official report.  CDS on Halliburton started out moderately wider on the headlines, but is currently about 38 bps wider than yesterday’s close. Anadarko and Transocean are essentially unchanged. But this can change quickly.

The market’s reaction on BP CDS will come in Friday’s London session

“Whether the report constitutes a ‘smoking gun’ or not remains to be seen, but it has that potential. Litigation risk is high even if the total amount is uncertain. The distribution of the burden, unlike hardened cement, is still fluid,” vice president Otis Casey at Markit writes in a comment.

(www.markit.com)

.

Back in May, it was  the Transocean CDS that got the biggest kick.

(www.cma.com)

 

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How Will BP Raise $50 Billion?

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 24.08.10 at 12:17

The drilling of the relief well in the Gulf of Mexico continues to hold our attention. But in the aftermath of the spill and – as pointed out several times here at the Econotwist’s Blog –  the fate of BP’s global assets may provide the greatest long-term complications.

“My sources high up in BP are clear about one thing: The company has three ways to raise that kind of money… and they are moving on all three fronts.”

Dr. Kent Moore


Selling its assets is one way for BP to put together the funds needed to pay its expected liabilities. Those sales are moving right into a new round of mergers and acquisitions that are taking place anyway in the oil and gas sector due to rising volatility and the inability of some to withstand the uncertainty. So, the Big Oil are about to get much bigger – except for BP, of course.

BP are likely to emerge from the mess it created in the Gulf as a smaller, leaner, and hopefully, wiser company.

“Though, having been an adviser to these guys on three continents, I would not hold my breath on that last one,” oil industry expert Dr. Kent Moore writes in a recent newsletter.

But they do, however, have an overall plan:

Public attention remains focused on the $20 billion fund for compensation and the payments that are beginning to be made from it.

Yet the BP brain trust has decided the aggregate liability could well extend to $50 billion.

At least that seems to be the line they are drawing on the courtroom floor, as they move into years of litigation, assessing of damages, and counter-suits with other affected companies – Transocean, Halliburton, Anadarko Petroleum and Cameron International.

Dr. Kent Moore

“My sources high up in BP are clear about one thing: The company has three ways to raise that kind of money… and they are moving on all three fronts,” Dr. Moore writes

BP is acquiring lines of credit in the amount of $15 billion to $20 billion, one already secured from Credit Suisse (more on that one in a moment).

Then they plan to obtain between $15 billion and $30 billion from the sale of assets.

And, finally, they will either issue a supplemental placement for the remainder in BP common stock or float bonds.

Of course, the more they have to rely on this last option; the more they are effectively diluting existing shares or mortgaging future cash flow.

Support from sovereign wealth funds, especially those in the Persian Gulf, may temper that somewhat.

After all, a private placement with a buyer not interested in reselling the shares anytime soon would be the preferred approach, as would bonds with a likely rollover potential.

Here’s The Basic Problem

BP will be spinning off assets. They have already done so in several parts of the world.

Moving forward, that reduces the company’s profit base – not a preferable environment for issuing additional shares. Or, for securing bank credits, for that matter…

Because in addition to the assets it puts on the auction block, BP will need to tie up other assets as collateral for the loans it will take out.

BP To Become RP?

And that has some governments concerned. Like the Kremlin, for instance.

Trouble in Russia… Vietnam… Venezuela…

About-to-be-replaced CEO Tony Hayward (you remember, the poor fellow who wanted his life back) was jetting around the Persian Gulf looking for financial support to avoid either a collapse or a takeover.

Exxon Mobil, for one, has been flying circles overhead, waiting to see if the patient dies.

(According to the Norwegian oil industry expert professor Øystein Nordeng, Statoil is also hunting for leftovers from the BP cadaver.)

In the middle of the trip, Hayward was summoned to Moscow.

Officials there were livid.

BP used a stake it owns in their state-controlled oil giant Rosneft as collateral for that Credit Suisse loan, mentioned above.

Russian officials literally called Hayward on the carpet and demanded to know what the company’s overall strategy was going to be.

From Russia With...Nothing

Here’s one clue that you are in hot water with the government: You come into town as one of the major foreign investors in the country, yet neither President Dmitry Medvedev or Prime Minister Vladimir Putin has time to see you.

For BP and Hayward, the best they could rustle up was Deputy Prime Minister Igor Sechin, who has oil and gas in his portfolio.

Now, Sechin is a no-nonsense administrator.

He had a great concern in assessing BP’s intentions: the fate of the half BP owns of one of Russia’s top five oil producers, TNK-BP.

(The investor’s play is with the holding company actually controlling the joint venture’s assets – OTC:TNKBF.)

The Kremlin apparently received the assurance they were looking for – BP will not be selling its holding abroad.

Don’t be surprised if the Russian partners in TNK-BP end up buying the whole package outright…

Needs Cash – Now!

BP needs to raise cash quickly, and for that to happen, it will need to select assets carefully and sell them at a discount.

Plus, the Russian government is always paranoid about national resources being owned by foreign parties.

And then there is the curious fact that TNK-BP is uncomfortably grandfathered under a new Russian statute.

The venture controls strategic fields that, the law says, can have foreigners owning only minority positions.

“And there is BP, sitting out there like a sore thumb, owning half of all of them,” Mr. Moore comments.

Recognizing that BP is in an untenable position, some other governments are not waiting.

Vietnam has decided that BP will be removed as operator in a new offshore project. Hanoi is actively shopping around the position to other international majors.

And then there is Caracas…

TNK-BP was one of five Russian majors banding together in a major deal to develop fields in Venezuela’s Orinoco heavy oil belt. BP is pulling out, under pressure from President Hugo Chávez.

In areas as far-flung as Columbia, Texas, Egypt, Pakistan, and Alaska, BP has sold, or is planning to sell,  its production assets.

Here’s cash the only thing that matter – no fancy stock swaps allowed in these transactions!

The Harder They Come, The Harder They Fall

The sales may end up accounting for more than 10% of the company’s about $250 billion in worldwide assets and reduce the company’s production figures by at least that much.

“This means that the money problems facing the company may be the longer-term problem in the aftermath of the Macondo spill. The production assets BP has to relinquish to survive could end up plaguing the company’s bottom line long after it has settled the lawsuits,” Dr. Kent Moore concludes.

But there are those living in the Gulf States who might have a word for that – “Justice”.

Here’s more from Dr. Kent Moore:  “How To Play In The Big League”

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Related by the Econotwist:

BP Collecting Millions In Government Stimulus Funds

BP’s Oily Aftermath – Colbert Style

So, You Thought BP Was An OIL Company?

Response To The BP Derivatives Story

New CEO Isn’t the Long-Term Answer at BP, Expert Says

Statoil May Buy BP Assets, Expert Says

BP Rules Out Issuing New Shares

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Fears Of Oil Spill Consequences Subside, CDS Spreads Show

EU To Seek Temporary Ban On Deep-Water Oil Permits

Gulf Oil Spill: A Carefully Planned Inside Job?

Readers Response: The BP Conspiracy

Oil Spill Makes Waves

BP Is Drowning In Its Own Oil Spill

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Norway's Government Pension Fund Takes $25bn Hit

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics on 13.08.10 at 20:40

Norway’s Government Pension Fund Global returned -5.4% (NOK -155 billion/USD -25 billion) in the second quarter of 2010, pulled down by a decline in global equity markets – especially by BP where the fund is the fourth largest shareholder.

“The spill put the spotlight on safety standards in the oil industry.”

Yngve Slyngstad


“The biggest stock market drop was in Europe, where the fund has about half its equity investments. The decline was largely driven by concern over high sovereign debt in some European countries, funding challenges for banks and fears of a new economic slowdown,” says Yngve Slyngstad, Chief Executive Officer of Norges Bank Investment Management (NBIM).

The fund’s investments consisted of 59.6 percent equities and 40.4 percent fixed-income securities at the end of the quarter. These had a second-quarter return of -9.2 percent and 1 percent, respectively, measured in international currency.

The fund’s return was in line with the return on its benchmark portfolio, NBIM says.

Yngve Slyngstad

The market value of the fund rose 29 billion kroner to 2,792 billion kroner.

A decline in the krone exchange rate added 149 billion kroner to the market value, which was also increased by 35 billion kroner in capital inflows from the government.

This was partially offset by the negative quarterly return of 155 billion kroner.

The single worst-performing investment was in oil producer BP. The company’s oil spill in the Gulf of Mexico in April was the largest in U.S. history and BP’s share price halved in the second quarter.

“The spill put the spotlight on safety standards in the oil industry,” says Slyngstad. “NBIM supports the board of BP’s commitment to ensure that safe and reliable operations top the company’s set of priorities. We also seek a wider industry effort that should be led by the largest companies to improve.”

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Here’s a copy of the full Q2 report by NBIM.

Related by the Econotwist:

Here’s The REAL Norwegian PIIGS Exposure

Norwegian Pensioners Enter Bear Market

Norway At The End Of An Era

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Norway’s Foggy Outlook

Statoil May Buy BP Assets, Expert Says

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EU To Seek Temporary Ban On Deep-Water Oil Permits

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics on 11.07.10 at 02:56

EU energy commissioner Gunther Oettinger says that EUs member states should stop giving out fresh permits for deep-water oil drilling in the light of the BP oil catastrophe. The commissioner has launched talks with oil firms and member state authorities on future proposals regarding supervision, emergency planning, clean-up operations, environmental liability and compulsory oil spill insurance.

“National supervision will certainly remain in place but it would be a good idea to have overarching European standards and a European supervisory authority.”

Gunther Oettinger


“I am considering discussing this with member states, so that when new permits are issued, especially in extreme cases, they will consider deferring this,” Mr. Oettinger told MEPs at a debate in Strasbourg earlier this week.

“I am actually considering suggesting a moratorium at this moment … And I think it is really not justifiable to be issuing licenses or permits for further drilling operations at this moment,” he added.

The commissioner underlines that decisions on oil permits are made exclusively by national capitals. But he said member states should consider giving away some powers in future.

“National supervision will certainly remain in place but it would be a good idea to have overarching European standards and a European supervisory authority,” he says.

Talks In Progess

Mr Oettinger has already launched talks with oil firms and member state authorities with a view to future proposals on supervision, emergency planning, clean-up operations, environmental liability and compulsory oil spill insurance.

On the pro-industry side, he noted that BP and Shell are major European employers.

He also pointes out that despite EU plans to move toward renewable energy, Europe, and in particular its aviation and road transport sectors, is going to be dependent on oil for decades to come.

Mr Oettinger said he would be happy if just 10 percent of the 200 million petrol-powered cars on the road in the EU today could be retired by 2020.

“Over the next few decades if we accept individual mobility, if we want to keep on manufacturing cars, then oil will have a role to play,” he explained to the EU MEPs.

How Deep Is Deep-Water?

There is no standard definition of “deep-water.”

The US designates wells below 305 meters as “deep-water,” but its largest private oil company, ExxonMobil, says only wells below 400 meters qualify.

The vast majority of sub-400-meter oil fields are off the eastern coasts of Brazil and the US and the west coast of Africa.

There is just one, north of the UK, in the EU region.

Two deep-water development operations are also ongoing in the Adriatic and Mediterranean seas.

Norway became in June the first country outside the US to announce a temporary ban on new deep-water oil and gas drilling.

BP at the time urged governments not to make knee-jerk reactions to the US disaster, which happened at 1,500 meters depth.

“Companies have been drilling in deep water in the Gulf Of Mexico for 20 years and until now have had a good safety record,” its global chief of staff, Steve Westwell, says.

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Dockwise To Assist BP In Gulf Oil Spill Clean Up

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics on 19.06.10 at 10:46

The worlds largest operator of specialized heavy-lift vessels, Dockwise, is sending one of it’s most advanced semi-submersible ships to the Gulf of Mexico to assist BP with the clean-up after the catastrophic oil spill.

“This is a very humbling experience when one considers the magnitude of the spill.”

Robb Erickson

Mighty Servant 3

Mighty Servant 3

Dockwise announces its commitment to assist with the oil spill clean up in the Gulf of Mexico. In a coordinated effort with T&T International Fire & Salvage, and BP, Dockwise has delivered the semi-submersible heavy-lift vessel, Mighty Servant 3, to the clean-up operation.

As one of the largest vessels of its type in the world, the Mighty Servant 3 has been outfitted in Galveston, Texas, with an assortment of equipment focused on the collection of oil-saturated solid material and oily water.

With its large size (180.00 m x 40.00 m), and a deadweight of 27,270 metric tons, the sheer mass of this unique vessel means it is perfectly suited to handle this type of large clean up. Outfitted with long reach excavating equipment and a stern mounted skimming system, the Mighty Servant 3 will serve a two-fold purpose as part of the coordinated clean-up effort.

The long-reach excavators will be able to collect solid debris that is saturated with oil. This debris will be collected and stored in a large containment area on the vessel’s extensive deck. The skimming system will collect oil and then transfer it to a tank barge working alongside the Mighty Servant 3.

The vessel will work in coordination with other smaller vessels assisting in the clean-up.

The Dockwise Group of Companies operates the largest fleet of specialized vessels in the world: A versatile fleet of 20 semi-submersible, heavy transport vessels of different concepts and designs. Dockwise provides specialty services in the Heavy Marine Transport, Transport & Installation, and Logistical Management industries.

Dockwise welcomes the opportunity to assist in this unprecedented clean-up effort.

“Looking for innovative solutions is our business. And we’re bringing in a big vessel to handle a big job. The opportunity to deploy this unique piece of equipment in support of this unprecedented clean-up effort instills positive emotions about making an impact, but at the same time this is a very humbling experience when one considers the magnitude of the spill,” Robb Erickson, Vice President Heavy Marine Transport, says.

Dockwise Ltd., a Bermuda incorporated company, has a workforce of more than 1200 people both offshore and onshore. The company is the leading marine contractor providing total transport services to the offshore, onshore and yachting industries as well as installation services of extremely heavy offshore platforms.

The Group is headquartered in Breda, The Netherlands. The Group’s main commercial offices are located in The Netherlands, the United States and China.

Dockwise shares are listed on the Oslo Stock Exchange under ticker DOCK and on NYSE Euronext Amsterdam under ticker DOCKW.

Market Statement

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Gulf Oil Spill: A Carefully Planned Inside Job?

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 16.06.10 at 11:57

Could the catastrophic Gulf of Mexico oil rig explosion be part of a larger scheme to “reform” the energy industry, just as the Obama administration has “reformed” health-care, banking and automobile manufacturers? Well, Victor Thorn, a hard-hitting researcher, journalist and the author presents the theory in a recent article published by the Gerald Celente Trends Research Journal.

“The Rothschilds have spent huge amounts of money promoting the global warming hoax. Goldman Sachs is obviously an arm of their empire, whereas BP is among a host of companies in Nathan Rothschild’s portfolio.”

Victor Thorn


Could the catastrophic Gulf of Mexico oil rig explosion be part of a larger scheme to “reform” the energy industry, just as the Obama administration has “reformed” health-care, banking and automobile manufacturers? Worse, is “cap and trade”—possibly the worst legislation ever penned—the ultimate endgame behind this spill, which they are now capitalizing upon?

That’s the question Mr. Thorn raise in a recent article, posted on the Gerard Celente Trends Blog.

Personally, I have a hard time believing in any big conspiracies – the world is just too big and too complex – but I love reading about them. They certainly makes you think twice about things.

So, without further comments, here’s Victor Thorn’s theory on the catastrophic oil mess in the Gulf of Mexico:

Victor Thorn

Victor Thorn

The first red flag receiving virtually no attention is that Halliburton (of Dick Cheney fame) had finished a cementing process only 20 hours prior to Deepwater Horizon erupting in flames. Lawsuits have already been filed, with Reuters reporting on April 29, “Halliburton improperly and negligently performed its job in cementing the well, increasing the pressure at the well and contributing to the fire, explosion and resulting oil spill.”

As a result, a high-pressure pocket of deep oil 30,000 feet beneath the ocean floor erupted with the force of a gigantic, non-stop fire hose. A surviving worker on the rig, John Kersey, said it sounded “like a war zone” as alarms were triggered, electricity shorted out, and flames shot 300 feet into the air. The inferno-like blaze could be seen 35 miles away.

Connections

Suspicions arise when an ownership paper trail is followed. Halliburton subcontracted for a company named Transocean, which leased and operated Deepwater Horizon for British Petroleum (BP). Transocean is a subsidiary of Sonat Inc., which merged with the El Paso Corporation (EPC) in March 1999. Douglas Foshee, EPC’s chairman, president and CEO, was hired away from Halliburton. The interim CEO prior to his arrival was Ronald Kuehn of Sonat.

Another previous CEO of EPC was William Wise, who served with Cheney on the influential National Petroleum Council. EPC was the largest single contributor from Texas for Bush-Cheney’s 2000 presidential campaign. Similarly, Wise helped Cheney raise $8 million for the National Republican Senatorial Committee.

Tony Hatward - Barack Obama

These incestuous relationships aren’t limited to the GOP. Barack Obama and his Chicago crime network expect to reap handsome profits in the future. Step No. 1 in this process began with Chicago’s Joyce Foundation, which had John Ayers (brother of terrorist William Ayers) on its board.

Another board member was then-Illinois Sen. Barack Obama.

The Joyce Foundation created the Chicago Climate Exchange (CCX), which in turn received financing from Franklin Raines, former head of Fannie Mae, a prime mover in our recent housing market collapse and economic recession.

Of vital importance is CCX’s role as the sole “carbon trading system” under Obama’s cap-and-trade bill. CCX would act as a quasi-stock market to buy and sell energy emission allowances. Richard Sandor, CCX founder, estimated a $10 trillion potential for this easily manipulated market.

Bilderberg Influence

With that much money at stake, a host of high rollers enter the picture.

Namely, one company with a huge ownership interest in CCX is Generation Investment Management (GIM), whose chairman is former Vice President Al Gore.

Four other GIM founders include Henry Paulson, David Blood, Mark Ferguson and Peter Harris—all of Goldman Sachs.

Not surprisingly, Goldman Sachs purchased 10 percent of CCX in 2006.

One other individual on CCX’s board of directors is the controversial Maurice Strong, a New Age occultist with direct ties to the Rockefellers and the Rothschilds.

Peter Sutherland

Since Goldman Sachs has now become part of the equation, we next need to examine its non-executive chairman, Peter Sutherland, who formerly filled the same role at BP, the company at the center of this debacle. As the third-largest global energy company in existence, BP has four direct links to Bilderberg: former CEO John Brown, chairman Carl Henric Svanberg, chief executive Tony Hayward and Sutherland.

In addition, Sutherland formerly served as the World Trade Organization’s director general, EU commissioner and chairman of the European Trilateral Commission.

This background information is important because the top recipient of BP donations during the 2008 presidential campaign was Obama. Similarly, the second highest political action committee contributing to a political candidate in 2008 was Goldman Sachs. The beneficiary of their largess: Obama.

Undoubtedly, one of Obama’s primary big government missions is to enact cap-and-trade legislation. To implement this plan, influential decision makers such as Robert Rubin, Larry Summers, Paul Volcker and Timothy Geithner are all members of the financial mafia. In this vein, David Mayer Rothschild stressed that last year’s Copenhagen environmental summit was “an attempt to establish a world government.”

Likewise, AFP editor Jim Tucker reported on March 24, 2007 that General Lord Guthrie, director of N.M. Rothschild & Sons, said political leaders should “address the global climate crisis with a single voice, and impose rules that apply worldwide.”

The Rothschilds have spent huge amounts of money promoting the global warming hoax. Goldman Sachs is obviously an arm of their empire, whereas BP is among a host of companies in Nathan Rothschild’s portfolio.

A Team Effort

Considering the nature of these prominent players, one factor binds them all together. Cap and trade, via the CCX, will tax carbon-dioxide emissions and generate trillions in revenue.

Only a month ago, however, this legislation sat dead in the water with virtually no support from Congress or the American public. But now, with an environmental catastrophe at hand, could it be resurrected and enacted in a way that mirrored President Clinton’s counter-terrorism bill following the OKC bombing?

Ironically, big oil and global bankers are two of the most ardent supporters of climate change legislation. In this sense, seeming adversaries such as “environmentalist” Gore and BP are on the same team; as are Cheney’s Halliburton, Goldman Sachs and Obama’s CCX. It should also be noted that prior to their demise, the corrupt Enron Corporation lavished huge amounts of praise on cap and trade legislation.

Lastly, if gasoline prices surge this summer due to the Gulf of Mexico spill, one obvious benefactor will be the new green-friendly “smart cars” owned by GM (Government Motors).

As AFP goes to press, all containment efforts have failed as millions of gallons of oil continue to gush into the Gulf of Mexico on a weekly basis.

Victor Thorn is a researcher, journalist and the author of several books on 9-11 and the New World Order.

Original post here.

Related by the Econotwist:

Are Governments Producing Conspiracy Theories?

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

Oil Spill Makes Waves

BP Is Drowning In Its Own Oil Spill

Fitch Warns Of New Speculative Oil Spike

Hydro Issue Risk Warning In Vale Takeover Deal

Most Polluting Companies Makes Billions On Carbon Trade

Another Carbon Fraud Raid Reveals Firearms, Piles Of Cash

As Climate War Intensifies, So Does Extreme Weather

Hackers Steal CO2-emission Permits Worth $4bn

More Mysterious “Monster Fish” Comes To Surface

Mother Earth On Crack

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Norway's Oil Fund Among BP's Largest Shareholders As Bankruptcy Rumors Hit Market

In Financial Markets, International Econnomic Politics, National Economic Politics, Views, commentaries and opinions on 09.06.10 at 20:58

The BP stocks are getting bashed with a variety of rumors as to the cause.  One of the main triggers is a Fortune article, which quotes oil industry veteran Matt Simmons who says  BP has about a month left before they declare Chapter 11. Among the top 5 shareholders in the oil giant is the Norwegian Government Pension Fund.

“They have about a month before they declare Chapter 11. They’re going to run out of cash from lawsuits, cleanup and other expenses.”

Matt Simmons


At the moment the BP stocks are down by more than 11% at New York Stock Exchange. Speculation about a Chapter 11 filing is just one of several rumors buzzing around on Wall Street right now, an other is that BP has hired a bankruptcy lawyer. But this is still just speculations. However, day traders are probably having a great time!

In an article in Fortune Magazine, published at CNNMoney.com, the well known oil and gas industry insider, Matt Simmons, speaks with a bold voice and makes even bolder predictions.

For more than 35 years, Simmons has run a Texas-based boutique investment bank, Simmons & Co., which specializes in the energy industry. At times, with his somewhat doom-and -loom-like take on things, there’s a hint of conspiracy theorist in his tone.

But it’s hard to ignore that Simmons is deeply connected and has been pretty much right on in the past.

These days, Simmons has been weighing in on BP (BP) and the worst oil spill in U.S. history, following the explosion of the Deepwater Horizon drilling rig in the Gulf of Mexico.

As BP struggles to permanently stop the gush of oil, Simmons has been warning that the scale of the spill is much bigger and that there’s a larger leak several miles away.

On question of how he see the future of BP, he says:

“They have about a month before they declare Chapter 11. They’re going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn’t enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they’ll panic and go into Chapter 11.”

According to Zero Hedge, the other rumor which is gaining traction, is that BP has hired a bankruptcy lawyer.

But as ZH points out:

“Seeing how today was the 1,293,498th time the Radioshack LBO rumor pushed the stock higher, all this media rumormongering should certainly be taken with a blob of oil.”

Another Lucky Bet?

As it turns out; wherever there’s a bankruptcy, there’s Norwegian tax payers money involved.

Lehman Brothers, Greece, Spain, you name it….

More than 10% of the nearly NOK 3 trillion fund is invested in the PIIGS countries, and almost 50% are invested in the Chinese equity market who recently entered a so-called “bear marked.”

And when it comes to BP, the Norwegian Government Pension Fund Global is the fourth largest shareholder in the company with a 1,8% ownership.

Here’s the list of the top 10 BP investors:

The world’s biggest asset management company is based in New York and owns 5.9pc of the shares.

Legal & General:

The UK insurer and asset manager owns 4pc of the shares.

Barclays Global Investors:

The asset manager, which is owned by BlackRock, owns 3.8pc of the shares.

Norges Bank Investment Management:

The asset manager manages the money generated from Norway’s oil revenues and owns 1.8pc of the shares.

M&G Investment Management:

The UK asset manager, owned by the Prudential, owns 1.67pc of the shares.

Standard Life:

The Scottish insurance company owns 1.5pc of the shares.

Capital Research & Management Co:

The Los Angeles-based fund owns 1.3pc of the shares.

Insight Investment Management:

The fund manager owned by Lloyds Banking Group owns 1.13pc of the shares.

China’s State Administration of Foreign Exchange:

The body that manages China’s $2.4 trillion of foreign-exchange reserves owns 1.1pc.

(Data from Bloomberg as of June 3.)

Related by the Econotwist:

Norway At The End Of An Era

Norwegian Pensioners Enter Bear Market

Here’s The REAL Norwegian PIIGS Exposure

Evaluation Of Norwegian Monetary Policy

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Oil Spill Makes Waves

In Financial Markets, Health and Environment, International Econnomic Politics, National Economic Politics on 04.06.10 at 01:09

The oil spill disaster in the Gulf of Mexico is now showing the first signs of financial impact on the oil industry as a whole. The responsible oil giant, BP, got its long term credit rating downgraded to AA- from AA+ and have bet put under watch for another possible downgrade by Fitch. According to the rating agency, rig owners stands to loose billions after all deep water drilling in the area have been banned.

“The decision to halt deep water drilling appears to be a rushed response to the growing criticism of the federal government and the president’s handling of the response to the oil spill in the Gulf of Mexico.”

Fitch Ratings


Fitch downgraded BP’s long-term senior unsecured credit rating to double-A from double-A-plus and placed the rating on watch negative as the company’s liability for the oil spill in the Gulf of Mexico escalated into billions of dollars and it faced a criminal investigation. The rating agency also warns of substantial impact on rig owners due to the temporary ban on deep water drilling.

“The downgrade of BP’s ratings reflects Fitch’s opinion that risks to both BP’s business and financial profile continue to increase following the Deepwater Horizon accident in the U.S. Gulf of Mexico,” the agency says in a statement.

“The company has so far repeatedly failed to stop the resultant oil leak and has instead reverted to containment methods that are yet to be fully implemented and are subject to potential weather related disruption.”

“An additional factor supporting the downgrade is the 1 June 2010 announcement by U.S. Attorney General, Eric Holder, that both a criminal and civil investigation has opened,” Fitch says.

Credit markets shrugged off the downgrade, and the cost of insuring the company’s bonds remained lower than Wednesday’s close, according to CMAvision. Five-year BP credit default swaps are now at 228.9 basis points, from 259.0 basis points late Wednesday. This is still more than 170 basis points wider than its level at the start of May.

Only The Beginning?

But this might just be the beginning of a series of downgrades in the oil & gas industry, Fitch warns in a special report.

The rig owners that operate in the area stands to loose USD 2,27 billion if the ban on deep water drilling is not lifted within six months.

If the rigs is up and running again within a month, the losses will be limited to 354 million, according to the estimates.

“This report is designed to provide a high-level overview of the impact to the recent announcement by President Barack Obama that all deepwater U.S. Gulf of Mexico (GOM) drilling is to be halted. The decision to halt deepwater drilling appears to be a rushed response to the growing criticism of the federal government and the president’s handling of the response to the oil spill in the GOM. As a result, details of the moratorium have yet to emerge from regulators, and correspondingly, all financial metrics reported in this analysis are very high level and tentative. There is considerable uncertainty with regard to both the ultimate length of time that the moratorium will be in place and the impacts on the existing drilling contracts due to the resulting loss of revenue from force majeure clauses being invoked.”

Here’s a copy of the special report on rig companies by Fitch Ratings.

The oil rig operators in the area are:

BP

Diamond Offshore

Ensco

Frontier Drilling AS

Maersk Drilling

Noble Corp.

Pride International

Seadrill Ltd.

Stena Drilling

Transocean

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