Who Decides if a BP Spill Claim Is Legitimate?

By Bryan Walsh, TIME, June 11, 2010

Legitimate. It's the word that could come to define the extremely expensive, extremely litigious aftermath of the Gulf of Mexico oil spill. Almost from the beginning, BP has promised to pay what it calls all "legitimate" claims by people and businesses affected by the spill. But legitimate, when it's contained in a print ad as part of BP's new multimillion-dollar campaign or poshly pronounced by CEO Tony Hayward in one of the accompanying TV commercials, sounds very different from the way it sounds coming out of the mouth of a bayou shrimper in Venice, La. What constitutes legitimate is still an open question.

At the very least though, it looks like BP won't be the only one who gets to decide. A day after demanding that the company turn over data about its financial-claim payment process, the Coast Guard reported that BP had pledged to expedite payment to affected businesses in the Gulf. "BP recognized that its previous approach of waiting until after the books have closed for each month to calculate losses will not work," Tracy Wareing of the Federal Emergency Management Agency said at a news conference Thursday. "It won't get dollars quickly enough to the businesses that are struggling on the ground." (See pictures of people protesting against BP.)

And reports are filtering back from Louisiana that BP's lost oil seems to be flowing a lot faster than its cash. David Camardelle, the mayor of Grand Isle in southeastern Louisiana, told a hearing of a subcommittee of the Senate Homeland Security and Government Affairs Committee that he knew of 37 applications from his community still waiting for their $5,000 claims check from BP. "Every day, I have a mom that comes in front of me and asks me, 'Mr. David, how am I going to get food for my kids,'" Camardelle said. "Please, please send us some help." (See photos of victims of the BP oil spill.)

BP has said that it has already paid over $80 million in claims to more than 10,000 individuals in Louisiana, Florida, Alabama and Mississippi, with more coming soon. The company also says that it has opened scores of claims centers around the affected coastline, and that it is trying to process claims in a few days at most. "We'll do this until it's finished," said Darryl Willis, vice president of resources for BP America, in a teleconference with reporters over the weekend.

To aid the company in speeding the payment process, Alabama is considering assigning National Guard troops to work at claims centers — a uniquely effective lever only the government can use. But the very nature of how many people work on the Gulf Coast is going to trump the number that will be answering phones and processing documents. And the very nature of the fishing industry won't help either. Fishing can bring in a lot of money in a very short period of time during the right season, but fishermen might be hard-pressed to provide evidence — bank statements, pay stubs — that can back that up. The same goes for many other businesses: if receipts are dwindling at a restaurant, or guests are cancelling at a resort, how is it possible to prove that the spill alone is responsible? "We're stuck in the middle," says Chris Camardelle, whose seafood restaurant in Grand Isle has been badly hurt by the oil spill. "So it's a tricky situation." (See a brief history of BP.)

The government has insisted repeatedly that BP will pay all the costs of the cleanup and all damages as well — and Washington seems willing to push the oil company as far as it can. But there will surely be limits. President Obama has said that he will push BP to compensate rig workers who have been laid off because of the six-month moratorium on deepwater drilling he instituted to fix the industry's safety standards, but there's skepticism that claim could hold. As BP comes under greater pressure politically in Washington, a backlash is beginning to build in Britain, especially over the question of whether BP will be able to make billions in expected dividend payments to shareholders even as the spill is continuing. "I do think it starts to become a matter of national concern if a great British company is being continually beaten up on international airwaves," London Mayor Boris Johnson told the BBC Thursday.

As the spill worsens, though, the pressure will only increase — and a new scientific estimate of the leak rate shows that Gulf catastrophe could be even worse than we ever imagined. After reviewing better video from the underwater leak, the government's Flow Rate Technical Group estimated on Thursday that the oil was escaping at a rate between 20,000 bbl. and 40,000 bbl. a day, and that was before robots severed the broken riser at the wellhead a week ago, which may have increased the flow by as much as another 20%. That's up from an earlier estimate of between 12,000 bbl. and 19,000 bbl., and an initial number of about 5,000 bbl. a day, though some independent scientists were arguing weeks ago that the flow was far higher than that. And it's still not certain. "Our scientific analysis is still a work in progress," said U.S. geological-survey director Marcia McNutt, the head of the flow-rate team. "In coming days we'll be refining our estimates further. (Read a Q&A on who's liable for the Gulf oil spill.)

The total amount of oil spilled into the Gulf will have an impact on the kind of damages claims the government — and private individuals — can bring against BP. But while it's important to get a fix on the leak, it won't be the final determination of the damage. "Even if we can't be precise about the amount of oil spilled, we can make conservative estimates of the losses suffered here, and they'll be huge," says David Uhlmann, the director of the environmental law and policy program at the University of Michigan Law School and a former prosecutor for the EPA. "But the easy part is going to involve the financial penalties and the civil penalties — the hard part will be restoring the region and making the victims whole."

Indeed, although BP's ubiquitous ads have said repeatedly that the company will "make things right," given the scale of the damages, that might prove impossible. And like with legitimate, the definition of the word right will be up for grabs. It will be defined, ultimately, by the courts; there have already been countless suits filed against BP by private individuals and businesses, and the government is pursuing an investigation of the spill too. "It's gearing up to be the most heavily fought legal battle in history," says Jody Freeman, founding director of the environmental law and policy program at Harvard Law School. So we know that one group will end up better off than when the spill started: the lawyers.

Congress Fights to Make Sure BP Pays for Oil Spill

Several Democrats have put forward a bill to get rid of the liability cap
By Kent Garber, U.S. News & World Report, June 15, 2010

BP says that it's already spent $1.5 billion on its response effort to the Gulf of Mexico spill, and it's repeatedly promised to pay "all legitimate claims" related to the disaster. But that promise has done little to calm fears that it will try to fight tooth and nail, much as Exxon did after the terrible Valdez tanker spill, to limit how much it has to pay out in the future.. [See which members of Congress get the most from the oil industry.]

Those fears have prompted a burst of activity on Capitol Hill, much of it focused on raising—or eliminating—what's known as the "liability cap." According to the Oil Pollution Act of 1990, if a spill occurs, the responsible company has to pay for all cleanup costs, no exceptions. But, in most cases, a company's liability is limited to $75 million for the long-term damage to the local economy, natural resources, and people's livelihoods. The cost of the Gulf spill will vastly exceed that number. [See photos of the Gulf oil spill.]

Last week, the White House voiced support for chucking the cap, saying it wants to make sure BP pays to help states rebuild their coasts and to allow fishermen and businesses to recover. Several Democratic senators agree and have put forward a bill that would get rid of the cap. Over in the House, Speaker Nancy Pelosi says she also favors the cap's removal and wants her chamber to produce legislation by July 4. On a separate track, the White House is now pushing BP to create an escrow account that would cover environmental and economic damages.

But striking the cap, it turns out, isn't going to be a slam-dunk, even amid the populist anger against BP. Several Republicans have argued that removing the cap altogether—which is to say, making oil companies fully liable for the entire cost of a spill—would make it close to impossible for all but the biggest oil companies to drill offshore because the potential financial risks from an accident would be too great. "It would appear to me that if we were to take the cap off altogether, it would institute a de facto ban on offshore drilling," Sen. Jim Inhofe, the Oklahoma Republican, said recently.

Democrats say their goal is not to stop offshore drilling but to make it safer. As Minnesota Democratic Sen. Amy Klobuchar noted, a $75 million cap seems pretty minor compared to the billions in profits oil companies make each year. "How is that an incentive to take safety measures?" she asked in a recent hearing.

In the current situation, these arguments may matter only so much. According to the 1990 law, the $75 million cap doesn't apply if the company is found guilty of "gross negligence or willful misconduct" or of violating "federal safety, construction, or operating regulations." No formal charges of wrongdoing have been leveled against BP yet, but the Justice Department has launched both civil and criminal investigations. With the Exxon Valdez incident, says Lloyd Miller, a lead plaintiffs' attorney in that case, the criminal charges hinged on being able to show that upper management was aware that the skipper of the vessel had a history of drinking on the job. "Once you have the upper management aware," Miller says, the court "can hold the company responsible."

BP, for its part, says that it's acting as if the cap isn't there. Testifying before a House committee this morning, BP America CEO Lamar McKay noted that BP expects to far exceed--and in fact already has exceeded--the cap. But that's providing little reassurance. Exxon has fought the penalties against it for much of the past two decades, and BP may do the same. The Obama administration is clearly hoping otherwise and is having the Coast Guard pressure BP to process claims from fishermen and affected businesses more quickly. That might bring some temporary relief. But the question of how much BP is going to have to pay surely is going to be around for years, if not decades, to come.

* See photos of the Gulf oil spill disaster.
* Check out our editorial cartoons on the Gulf oil spill.
* See who gets the most from the oil industry.

Documents reveal BP's missteps before blowout

Oil giant engineer describes 'nightmare well' six days before rig explosion
By MATTHEW DALY & RAY HENRY, AP, MSNBC.com, June 14, 2010

NEW ORLEANS - BP made a series of money-saving shortcuts and blunders that dramatically increased the danger of a destructive oil spill in a well that an engineer ominously described as a "nightmare" just six days before the blowout, according to documents released Monday that provide new insight into the causes of the disaster.

The House Energy and Commerce Committee released dozens of internal documents that outline several problems on the deepsea rig in the days and weeks before the April 20 explosion that set in motion the largest environmental disaster in U.S. history. The committee has been investigating the explosion and its aftermath.

"Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense. If this is what happened, BP's carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig," said Democratic Reps. Henry A. Waxman and Bart Stupak.

The missteps emerged on the same day that President Barack Obama made his fourth visit to the Gulf, where he sought to assure beleaguered residents that the government will "leave the Gulf Coast in better shape than it was before."

The breached well has dumped as much as 114 million gallons of oil into the Gulf under the worst-case scenario described by scientists — a rate of more than 2 million a day. BP has collected 5.6 million gallons of oil through its latest containment cap on top of the well, or about 630,000 gallons per day.

But BP believes it will see considerable improvements in the next two weeks. The company said Monday that it could trap a maximum of roughly 2.2 million gallons of oil each day by the end of June as it deploys additional containment efforts, including a system that could start burning off vast quantities as early as Tuesday. That would more than triple the amount of oil it is currently capturing — and be a huge relief for those trying to keep it from hitting the shore.

Possible 'game changer'

"It would be a game changer," said Coast Guard Chief Petty Officer Mark Boivin, deputy director for near-shore operations at a command center in Mobile. He works with a team that coordinates the efforts of roughly 80 skimming boats gathering oil off the coast.

Still, BP warned its containment efforts could face problems if hoses or pipes clog and engineers struggle to run the complicated collection system. Early efforts at the bottom of the Gulf failed to capture oil.

Meanwhile, congressional investigators have identified several mistakes by BP in the weeks leading up to the disaster as it fell way behind on drilling the well.

BP started drilling in October, only to have the rig damaged by Hurricane Ida a month later. The company switched to the Deepwater Horizon rig and resumed drilling on Feb. 6. The rig was 43 days late for its next drilling location by the time it exploded April 20, costing BP at least $500,000 each day it was overdue, congressional documents show.

As BP found itself in a frantic race against time to get the job done, engineers cut corners in the well design, cementing and drilling mud efforts and the installation of safety devices known as "lockdown sleeves" and "centralizers," according to congressional investigators.

In the design of the well, the company apparently chose a riskier option among two possibilities to provide a barrier to the flow of gas in space surrounding steel tubes in the well, documents and internal e-mails show. The decision saved BP $7 million to $10 million; the original cost estimate for the well was about $96 million.

'Crazy well'

In an e-mail, BP engineer Brian Morel told a fellow employee that the company is likely to make last-minute changes in the well.

"We could be running it in 2-3 days, so need a relative quick response. Sorry for the late notice, this has been nightmare well which has everyone all over the place," Morel wrote.

The e-mail chain culminated with the following message by another worker: "This has been a crazy well for sure."

BP also apparently rejected advice of a subcontractor, Halliburton Inc., in preparing for a cementing job to close up the well. BP rejected Halliburton's recommendation to use 21 "centralizers" to make sure the casing ran down the center of the well bore. Instead, BP used six centralizers.

In an e-mail on April 16, a BP official involved in the decision explained: "It will take 10 hours to install them. I do not like this." Later that day, another official recognized the risks of proceeding with insufficient centralizers but commented: "Who cares, it's done, end of story, will probably be fine."

The lawmakers also said BP also decided against a nine- to 12-hour procedure known as a "cement bond log" that would have tested the integrity of the cement. A team from Schlumberger, an oil services firm, was on board the rig, but BP sent the team home on a regularly scheduled helicopter flight the morning of April 20.

Less than 12 hours later, the rig exploded.

BP also failed to fully circulate drilling mud, a 12-hour procedure that could have helped detect gas pockets that later shot up the well and exploded on the drilling rig.

A spokesman for BP could not immediately reached for comment on the findings, but executives including CEO Tony Hayward will be questioned by Congress on Thursday.

The letter from Waxman and Stupak noted at least five questionable decisions BP made before the explosion, and was supplemented by 61 footnotes and dozens of documents.

"The common feature of these five decisions is that they posed a trade-off between cost and well safety," said Waxman and Stupak. Waxman chairs the energy panel while Stupak heads a subcommittee on oversight and investigations.

BP rig's safety valve failed test before oil spill explosion

The safety valve protecting BP's oil well in the Gulf of Mexico failed a key pressure test just hours before an explosion causing the deaths of 11 people and a growing environmental catastrophe.
By Rowena Mason, telegraph.co.uk, May 12, 2010

BP officials told an official hearing that the rig's safety device - known as a blowout preventer - had highlighted problems before the accident.

The Deepwater Horizon rig operated and owned by contractor Transocean caught fire and sank almost three weeks ago, leaving BP responsible for clearing up the huge spill.

At U.S. congressional hearings this week, BP and Transocean, the contractor, blamed one another for "a cascade of failures" that led to the massive oil spill threatening America's south-eastern coastline. BP continues its efforts to seal the leak, which is gushing 5,000 barrels per day into the ocean.

It emerged yesterday in the testimony of James Dupree, BP's senior vice president for the Gulf, that tests before the blast showed "discrepancies" in pressure levels. These tests are meant to ensure the integrity of cement poured into the well to keep out natural gas. Another contractor, Halliburton, had just finished cement work hours before the blast.

"There was something happening in the well bore that shouldn't be happening," said Steven Newman, Transocean's chief executive officer.

A Democrat member of the committee, Bart Stupak, reported that the blowout preventer "apparently had a significant leak". The device had also been modified in "unexpected ways," he said, and may not have been strong enough to shut the well.

Henry Waxman, the Democrat chairman of the committee, said the case cast doubt over the oil majors' insistence that deepwater drilling is safe.

"BP, one of the largest oil companies, assured Congress and the public that it could operate safely in deep water and that a major oil spill was next to impossible," Waxman said. "We now know those assurances were wrong."

Leaking Oil Well Lacked Safeguard Device

By RUSSELL GOLD, BEN CASSELMAN And GUY CHAZAN, WSJ.com, April 28, 2010

The oil well spewing crude into the Gulf of Mexico didn't have a remote-control shut-off switch used in two other major oil-producing nations as last-resort protection against underwater spills.

The lack of the device, called an acoustic switch, could amplify concerns over the environmental impact of offshore drilling after the explosion and sinking of the Deepwater Horizon rig last week.

The accident has led to one of the largest ever oil spills in U.S. water and the loss of 11 lives. On Wednesday federal investigators said the disaster is now releasing 5,000 barrels of oil a day into the Gulf, up from original estimates of 1,000 barrels a day.

U.S. regulators don't mandate use of the remote-control device on offshore rigs, and the Deepwater Horizon, hired by oil giant BP PLC, didn't have one. With the remote control, a crew can attempt to trigger an underwater valve that shuts down the well even if the oil rig itself is damaged or evacuated.

The efficacy of the devices is unclear. Major offshore oil-well blowouts are rare, and it remained unclear Wednesday evening whether acoustic switches have ever been put to the test in a real-world accident. When wells do surge out of control, the primary shut-off systems almost always work. Remote control systems such as the acoustic switch, which have been tested in simulations, are intended as a last resort.

Nevertheless, regulators in two major oil-producing countries, Norway and Brazil, in effect require them. Norway has had acoustic triggers on almost every offshore rig since 1993.

The U.S. considered requiring a remote-controlled shut-off mechanism several years ago, but drilling companies questioned its cost and effectiveness, according to the agency overseeing offshore drilling. The agency, the Interior Department's Minerals Management Service, says it decided the remote device wasn't needed because rigs had other back-up plans to cut off a well.

The U.K., where BP is headquartered, doesn't require the use of acoustic triggers.

On all offshore oil rigs, there is one main switch for cutting off the flow of oil by closing a valve located on the ocean floor. Many rigs also have automatic systems, such as a "dead man" switch as a backup that is supposed to close the valve if it senses a catastrophic failure aboard the rig.

As a third line of defense, some rigs have the acoustic trigger: It's a football-sized remote control that uses sound waves to communicate with the valve on the seabed floor and close it.

An acoustic trigger costs about $500,000, industry officials said. The Deepwater Horizon had a replacement cost of about $560 million, and BP says it is spending $6 million a day to battle the oil spill. On Wednesday, crews set fire to part of the oil spill in an attempt to limit environmental damage.

Some major oil companies, including Royal Dutch Shell PLC and France's Total SA, sometimes use the device even where regulators don't call for it.

Transocean Ltd., which owned and operated the Deepwater Horizon and the shut-off valve, declined to comment on why a remote-control device wasn't installed on the rig or to speculate on whether such a device might have stopped the spill. A BP spokesman said the company wouldn't speculate on whether a remote control would have made a difference.

Much still isn't known about what caused the problems in Deepwater Horizon's well, nearly a mile beneath the surface of the Gulf of Mexico. It went out of control, sending oil surging through pipes to the surface and causing a fire that ultimately sank the rig.

Unmanned submarines that arrived hours after the explosion have been unable to activate the shut-off valve on the seabed, called a blowout preventer.

BP says the Deepwater Horizon did have a "dead man" switch, which should have automatically closed the valve on the seabed in the event of a loss of power or communication from the rig. BP said it can't explain why it didn't shut off the well.

Transocean drillers aboard the rig at the time of the explosion, who should have been in a position to hit the main cutoff switch, are among the dead. It isn't known if they were able to reach the button, which would have been located in the area where the fire is likely to have started. Another possibility is that one of them did push the button, but it didn't work.

Tony Hayward, BP's CEO, said finding out why the blowout preventer didn't shut down the well is the key question in the investigation. "This is the failsafe mechanism that clearly has failed," Mr. Hayward said in an interview.

Lars Herbst, regional director of the Minerals Management Service in the Gulf of Mexico, said investigators are focusing on why the blowout preventer failed.

Industry consultants and petroleum engineers said that an acoustic remote-control may have been able to stop the well, but too much is still unknown about the accident to say that with certainty.

Rigs in Norway and Brazil are equipped with the remote-control devices, which can trigger the blowout preventers from a lifeboat in the event the electric cables connecting the valves to the drilling rig are damaged.

While U.S. regulators have called the acoustic switches unreliable and prone, in the past, to cause unnecessary shut-downs, Inger Anda, a spokeswoman for Norway's Petroleum Safety Authority, said the switches have a good track record in the North Sea. "It's been seen as the most successful and effective option," she said.

The manufacturers of the equipment, including Kongsberg Maritime AS, Sonardyne Ltd. and Nautronix PLC, say their equipment has improved significantly over the past decade.

The Brazilian government began urging the use of the remote-control equipment in 2007, after an extensive overhaul of its safety rules following a fire aboard an oil platform killed 11 people, said Raphael Moura, head of safety division at Brazil's National Petroleum Agency. "Our concern is both safety and the environment," he said.

Industry critics cite the lack of the remote control as a sign U.S. drilling policy has been too lax. "What we see, going back two decades, is an oil industry that has had way too much sway with federal regulations," said Dan McLaughlin, a spokesman for Democratic Florida Sen. Bill Nelson. "We are seeing our worst nightmare coming true."

U.S. regulators have considered mandating the use of remote-control acoustic switches or other back-up equipment at least since 2000. After a drilling ship accidentally released oil, the Minerals Management Service issued a safety notice that said a back-up system is "an essential component of a deepwater drilling system."

The industry argued against the acoustic systems. A 2001 report from the International Association of Drilling Contractors said "significant doubts remain in regard to the ability of this type of system to provide a reliable emergency back-up control system during an actual well flowing incident."

By 2003, U.S. regulators decided remote-controlled safeguards needed more study. A report commissioned by the Minerals Management Service said "acoustic systems are not recommended because they tend to be very costly."

A spokesman for the agency, Nicholas Pardi, said the decision not to require the device came, in part, after the agency took a survey that found most rigs already had back-up systems of some kind. Those systems include the unmanned submarines BP has been using to try to close the seabed valve.
—Jeff Fick contributed to this article.

Write to Russell Gold at russell.gold@wsj.com, Ben Casselman at ben.casselman@wsj.com and Guy Chazan at guy.chazan@wsj.com

Corrections & Amplifications:
The oil rig that exploded and sank in the Gulf of Mexico was owned by Transocean Ltd. and leased by BP PLC. A previous version of this article incorrectly said that BP owned the rig.

Coast Guard rejects BP oil leak plan as too little, too late

By Mark Seibel, McClatchy Newspapers, June 12, 2010

WASHINGTON — The Coast Guard has told oil giant BP that its proposed plan for containing the runaway Deepwater Horizon well does not take into account new higher estimates of how much oil is gushing into the Gulf of Mexico and demanded that the company provide a more aggressive plan within 48 hours.

In a letter dated Friday and released Saturday, Coast Guard Rear Adm. James A. Watson also said that BP was taking too much time to ready ships to capture oil spewing from the well.

"You indicate that some of the systems you have planned to deploy may take a month or more to bring online," Watson, who is the federal on-scene coordinator for the Deepwater Horizon disaster, wrote Doug Suttles, BP's chief operating officer. "Every effort must be expended to speed up the process."

The 48-hour deadline is the second the Coast Guard has given BP in the past week and indicates a growing recognition on the part of the Coast Guard that both BP and the Obama administration underestimated for weeks the amount of oil pouring from the well, which began leaking when an April 20 explosion shattered the Deepwater Horizon drilling rig, killing 11 workers. The rig sank two days later, taking a mile of well pipeline with it.

For weeks, the Obama administration and BP said the spill was leaking 5,000 barrels a day — about 210,000 gallons. On May 27, a government task force of scientists revised that estimate to a minimum of 12,000 to 25,000 barrels a day, and possibly much more. Then on Thursday, the government doubled those estimates to between 20,000 and 50,000 barrels a day, saying those, too, may understate the size of the leak because a decision to shear off the well's riser pipe to add a "top hat" containment device may have unleashed more oil.

The intervention by the Coast Guard comes as the oil continues to spread across the Gulf. Alabama advised residents not to swim in areas near the Florida border and in the Mississippi Sound. An access route to the Inter-Coastal Waterway, the Pensacola Pass, was closed Saturday evening during flood tide until further notice to keep oil from entering the bay. And tar-ball fields detected in the Gulf appear to be headed toward the Florida Straits.

Watson said the new estimates were the reason for the new deadline, saying the plan Suttles outlined was only "consistent with previous flow rate estimates."

"Because those estimates have now been revised . . . it is clear that additional capacity is urgently needed," he said.

BP said it would respond to Watson's letter "as soon as possible."

The White House was asked Saturday what action it would take if BP doesn’t speed up its effort to containment.

”This isn’t open for discussion,” a senior administration official said. “BP must do better to plan a more aggressive response. In the same way we pushed for second relief well, additional redundancy, more transparency, paying for the berms, etc…we will push them to find better answers to contain the oil.”

The official, who asked not be named as a matter of policy, said the letter to BP was “a unanimous Obama team decision.”

BP and Coast Guard representatives have been meeting throughout the week, Coast Guard officials have said, to refine the plan, which Suttles outlined in a letter to Watson dated Wednesday — before the new flow rate estimates were released. In his letter, Suttles said the plan had been outlined on Tuesday to Interior Secretary Ken Salazar and Energy Secretary Steven Chu. "No objections were raised," he wrote.

Under that proposal, BP outlined two phases — a temporary one involving three recovery ships and a jerry-rigged system combining the "top hat" containment device with hoses already in place from the "top kill" procedure that failed to stanch the well last month, and a more permanent one that involves construction of two new risers from the well that would be serviced by two large recovery ships that are en route to the site now.

BP said that the temporary phase would bring the amount of oil captured to 20,000 to 28,000 barrels a day by the end of next week. Most of that oil would be recovered by the Discoverer Enterprise drilling ship, which has been collecting around its stated 15,000-barrels-per-day capacity through the "top hat" but that Coast Guard officials believe can be pushed to 18,000 barrels a day. The remaining 5,000 to 10,000 barrels per day would be taken up by a second vessel, the Q4000 drilling platform, which would burn the oil in a rarely used, if not unprecedented, procedure. BP vice president Kent Wells said Friday that burning could begin as soon as Monday.

The burning idea has provoked some experts to raise questions about the health and environmental effects of the process.

Containment capacity would be pushed further during the temporary phase by the addition of a third vessel, the drill ship Discoverer Clear Leader, which would take on an additional 5,000 to 10,000 barrels a day when it is operational in mid July, Suttle wrote.

In the second, more permanent phase, Suttles said BP was building two permanent floating risers to provide oil to the Taisa Pisces and the Helix Producer recovery ships. Each riser takes about a month to complete, Suttles said. One is expected to be finished next week. Work on the second began Monday, June 7. Once operational, the new risers and ships would have capacity to receive between 40,000 and 50,000 barrels per day, BP said.

The plan foresees both the Q4000 and the Discoverer Clear Leader discontinuing operations once the new floating risers are operational, but says the Discoverer Enterprise would remain on site and could provide additional capacity, if needed.

In offering an estimate of the total capacity of the temporary phase, BP's plan is more cautious than numbers Coast Guard Adm. Thad Allen used in press briefings with reporters. On Friday, Allen said capacity would reach 38,000 barrels a day once the Discoverer Clear Leader is operational.

BP's numbers may be more realistic, however. While Allen has said that the Discoverer Enterprise could be pushed to receive 18,000 barrels per day, the actual amount it's recovered has declined by a few hundred barrels since it peaked at 15,800 barrels on Wednesday. On Thursday, the ship recovered 15,400 barrels and on Friday, it recovered 15,500 barrels, BP reported Saturday.

How much oil will flow to the Q4000 and the Discoverer Clear Leader is also uncertain. Neither vessel will be "pumping" the oil up from the sea, but instead will rely on the oil's natural pressure to push it up through hoses that were originally used to push drilling mud into the well's dysfunctional blowout preventer during the "top kill" effort. Based on the size of the hoses, the maximum amount likely to flow through to those ships would be 10,000 barrels per day, but could be less, depending on the oil reservoir's pressure.

Both Suttles and Wells warned that there could be additional delays in the plans because of adverse weather and conditions at the drill site, which officials describe as crowded with dozens of ships.

It was also unclear how soon additional equipment could be made available. The Q4000 was under contract to another oil company and only began working the Deepwater Horizon spill after that company agreed to release it. A tanker that will work with the Taisa Pisces to shuttle the captured oil ashore, the Loch Rannoch, is available only because BP has shut down for maintenance the North Sea well it was working, oil industry publications said. BP has yet to identify a second tanker needed to work with the Helix Producer.

BP Announces Deepwater Gulf of Mexico Discovery - Teams Up With Israeli Co.'s Partner Noble Energy

BP website, Release date: June 6, 2007

HOUSTON, TX - BP Exploration & Production Inc. (NYSE: BP) announced today a hydrocarbon discovery in an exploration well that tested its Isabela prospect in the Gulf of Mexico. The well is located on Mississippi Canyon Block 562 in approximately 6,500 feet of water, about 150 miles southeast of New Orleans. Isabela was drilled to a total depth of approximately 19,100 feet into Miocene era sands.

“Isabela is an excellent addition to our portfolio of discoveries in the Gulf of Mexico” said Dave Rainey, BP’s Vice President of Gulf of Mexico Exploration. “It will likely be tied back to our Na Kika production platform, helping to maximize the value of that infrastructure.”

The well is operated by BP Exploration & Production Inc. with a 67% working interest and is co-owned by Noble Energy, Inc. (NYSE: NBL) with a 33% working interest. The lease was acquired at federal OCS Lease Sale 169 in March, 1998.

BP is one of the world’s largest energy companies, with interests in more than 100 countries and over 100,000 employees across six continents. BP’s business segments are Exploration and Production; Refining and Marketing; and Gas, Power and Renewables, which includes its Alternative Energy business. Through these business segments, BP provides fuel for transportation, energy for heat and light, retail services, and petrochemical products.

Further information:
Name: Neil Chapman
Office: BP Press office, Houston
Telephone: 281-366-7115

Israeli Tshuva in talks to buy all BP gas stations in France: A deal will boost the number of Delek's gas stations in Europe to over 1,200

Globes - McClatchy-Tribune Information Services via COMTEX, TradingMarkets.com, Feb. 04, 2010

Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG) subsidiary Delek Europe BV is in negotiations with BP Group plc (NYSE; LSE: BP) subsidiary BP France SA to acquire all its 416 petrol stations in France for ae180 million. Delek Group expects to close the deal during the second half of the year.

Delek Group has already paid BP France ae10 million for negotiations exclusivity, which is valid through October 15. Delek Group will pay an additional ae10 million down payment when a contract is signed.

In addition to the gas stations, the deal includes 300 convenience stores and 200 carwashes. Delek will continue to operate the gas stations under the BP brand. The deal will probably also include a long-term agreement for the use of fuel cards.

If a deal is closed, Tshuva will hold a 3 percent share of the French gas stations market.

Delek Group owns Delek Europe through wholly-owned subsidiary Delek Petroleum Ltd. (TASE: DLKP.B7; DLKP.B8) (80 percent) and Delek Israel Fuel Corporation Ltd. (TASE: DLKIS) (20 percent). Delek Europe owns Delek Benelux BV, which operates 870 Texaco brand gas stations in the Netherlands and Belgium.

A deal will boost Delek Europe's gas stations in Europe to over 1,250. Delek Israel operates 1,000 gas stations in Israel.

Delek Group's share rose 0.5 percent by mid-afternoon to NIS 809.60, giving a market cap of NIS 9.2 billion. Delek Israel's share fell 0.1 percent to NIS 159.50, giving a market cap of NIS 1.81 billion.

Israeli Company Delek Buys BP Gas Stations for $33.5 Million

AllBusiness.com, Nov. 8, 2005

NASHVILLE, Tenn. -- Delek Group Ltd. announced that its subsidiary, Delek US Holdings, had bought the rights in 25 gas stations and convenience stores in Nashville, Tenn., from British energy giant BP for $33.5 million, not including inventory, reported Globes online. The deal is expected to be closed in December.

The contract involves ownership rights to 20 gas stations, and leasing rights to five more. It also includes four other real estate properties slated for gas stations and convenience stores, including ownership rights for three properties and leasing rights for one property, according to the report.

Delek added in the report that the gas stations and convenience stores would continue to operate under the BP brand.

In its financial report for the second quarter of 2005, Delek said that Delek US Holdings owned 328 gas stations in Tennessee, Alabama and Virginia under the Mapco Express brand. Delek also reported that the profit of its Texas oil refinery jumped to $72 million for the second quarter, reported Globes.

Coup leader poised to win Mauritania election

By Hademine Ould Sadi, AFP, Google News, July 19, 2009

NOUAKCHOTT — Coup leader Mohammed Ould Abdel Aziz looked headed for a first-round victory Sunday in Mauritania's presidential election, but the opposition denounced the vote as a charade.

Already overnight Saturday Ould Abdel Aziz's supporters had taken to the streets of the capital soon after polling stations closed to celebrate his expected victory.

According to the partial results from the electoral commission with 80 percent of ballots counted, Ould Abdel Aziz enjoyed 52.3 percent of the votes.

Ould Abdel Aziz was the leader of the coup last August that ousted Sidi Ould Cheikh Abdallahi, Mauritania's first elected head of state.

He ceded control as head of the junta in April and resigned from the army to contest Saturday's election.

But while he looked poised for outright victory, four of his opponents held a joint press conference to denounce what they called the "prefabricated results" of the election.

Parliamentary speaker Messaoud Ould Boulkheir told reporters: "The results which are starting to come out show that it is an electoral charade which is trying to legitimise the coup."

Ould Boulkheir, leading an anti-coup front, was his nearest challenger with 16.72 percent of votes.

With him at the present conference was Ould Daddah, head of the main opposition party, Ahmed Ould Daddah, who came in third with 13.86 percent.

Also present were Ould Mohamed Vall, the junta chief in 2005-2007, who scored 3.79 percent; and Hamai Ould Meimou, an independent candidate.

Their joint declaration called on the international community to carry out an independent enquiry into voting irregularities.

They also called on "competent bodies" such as the constitutional council and interior ministry not to validate the results, and for the Mauritanian people to "mobilise to defeat this electoral coup d'etat."

The electoral commission said voter turnout was 61.46 percent.

Saturday's election was meant to restore democracy in Mauritania, which has mostly known military rule since independence in 1960, by restoring constitutional democracy to this arid, but potentially oil-rich country.

Some 1.2 million of the nation's three million people were eligible to vote in the polls, which were monitored by international observers from the African Union, the Arab League and the association of Francophone countries.

After a lacklustre campaign, observers had thought no candidate would be strong enough to emerge with a first-round majority and that a second run-off vote would be likely on August 1.