BP's (BP) Mitsui (MITSY) Deal Clarifies Gulf Liability

Uncertainty as to the liability that BP's (NYSE:BP) partners in the Gulf of Mexico Macondo well became clearer for Anadarko (NYSE:APC) after a deal was struck between BP and Mitsui (OTC:MITSY) to pay $1.1 billion to BP for cleanup costs in the Gulf.

Mitsui owns a 10 percent stake in the well and Anadarko a 25 percent stake.

By extension, it would imply a $2.66 billion cleanup settlement for Anadarko, less than had been anticipated, pushing up the share price of the company.

Billions more will be worked out in a settlement between BP and its two partners concernings fines, and Mitsui and Anadarko appear ready to do their part and put the issue behind them.

Anadarko was trading at $75.18, gaining $3.54, or 4.94 percent, as of 11:55 AM EDT. Mitsui was trading at $334.86, up $2.24, or 0.67 percent. BP was at $44.83, rising $0.94, or 2.14 percent.

Transocean (RIG) Poor Safety Culture Contributes to Gulf Spill, Alleges Coast Guard

Saying the emergency training, equipment and safety culture of Transocean (NYSE:RIG) had flaws in it, the Coast Guard released a report alleging the company contributed to the failure of the Deepwater Horizon oil rig which exploded in the Gulf of Mexico while extracting oil and gas from the Macondo well owned by BP (NYSE:BP).

Transocean owned the rig, and was thus the primary bearer of responsibility for its safety, the reason the Coast Guard zeroed in on them.

According to the report, electrical equipment that may have been responsible for igniting the explosion was poorly maintained, while gas alarms and automatic shutdown systems were bypassed so that they did not alert the crew. Also alleged was rig workers didn't receive proper training on how and when to disconnect the rig from the well to avoid an explosion.

The reported concluded, "These deficiencies indicate that Transocean's failure to have an effective safety management system and instill a culture that emphasizes and ensures safety contributed to this disaster."

Transocean closed Thursday at $75.41, falling $0.20, or 0.26 percent.

BP (BP) Closer to Resuming Gulf Drilling?

BP (NYSE:BP) will probably start requesting permission to resume drilling in the Gulf of Mexico, according to Mark Gilman, an analyst with The Benchmark Company, who also believes after scrutiny, they will be approved to go ahead.

That's why the other companies have been allowed to resume drilling in the Gulf, as it was a test of public opinion and getting people used to things being safer in the industry.

Gilman said about BP, which is his favorite name in the space, "We're pretty comfortable that things are going in the right direction, and we're even more comfortable that the market hasn't priced it right yet."

He added that "although it might be considered heretical, it's my belief that, in fairly short order, BP will apply for drilling permits in the deepwater Gulf. And furthermore, I'd be surprised if, after appropriate scrutiny, they aren't approved."

BP was trading at $45.89, gaining $1.21, or 2.71 percent, as of 11:40 AM EDT. Gilman has a price target of $70 on the oil giant.

BP (BP) Waiting on Gulf Drilling Permits

Responding to a report in the Sunday Times of London alleging BP (NYSE:BP) has landed a permit to resume drilling in the Gulf of Mexico, Interior Secretary Ken Salazar refuted the statement today, saying that's not the case at this time.

“There is no agreement with respect to BP, nor will there be any agreement with respect to BP or anybody else that isn’t within the normal process that we have,” Salazar said on a conference call from Mexico City. “We receive applications for wells, and those applications will be taken through the same process, with the same rigorous review that we are requiring of any other company.”

Reports that BP was seeking permits was also apparently shot down, this time by Melissa Schwartz, a spokeswoman for Interior Department’s agency regulating offshore drilling, who said, “There are no ongoing talks. We issue permits based on the merits of the application.”

The term "ongoing" could be interpreted to mean that BP has indeed applied for permits (a certainty), but at this time they're simply waiting to wind through the process, as Salazar said, which wouldn't involve ongoing talks.

From the comments of the two, it seems to imply there have been permit requests from BP, but they're being treated like all others.

This is another way of saying they don't want to have to deal with the inevitable uproar that comes when BP is awarded a permit to continue drilling in the Gulf. It could also be a trial balloon to measure media and public response.

BP was trading at $45.73, up $0.07, or 0.15 percent, as of 1:55 PM EDT.

Statoil (STO) 6th to Receive Gulf Drilling Permit Since BP (BP) Spill

Under enormous pressure because of dragging its feet for months on getting drilling in the Gulf of Mexico going again, the Obama administration is starting to finally award permits, with the latest being to Statoil (NYSE:STO), the sixth new Gulf drilling permit handed out since the BP (NYSE:BP) oil spill, according to the U.S. Bureau of Ocean Energy.

Statoil's permit authorizes a new well to be drilled in Alaminos Canyon Block 810 in water 7,134 feet deep, about 216 miles off the Texas coast south of Texas City.

BOEM Director Michael Bromwich said, "This permit is the sixth we have approved since Feb. 17, when industry demonstrated it had the capacity to handle subsea blowouts and spills."

"Some say we are now proceeding too quickly; some say we are still proceeding too slowly. The truth is we are proceeding as quickly as our resources allow to approve permit applications that satisfy our rigorous safety and environmental standards."

In other words, the crisis in the Middle East underscores the need to drill for oil, and that more than anything else, is the reason the government is finally moving.

The rising price of oil and gasoline is the motivator behind all this, and it's more obvious that's the case because of the sudden drilling religion the Obama administration got.

If they had done the right thing and got the permitting process going quicker, the administration wouldn't be criticized for how allegedly "quickly" they're now issuing permits.

Statoil closed in New York Friday at $27.57, down $0.39, or 1.39 percent.

Chevron (CVX) Latest to Get Gulf Drilling Permit

There is no doubt the tension and unrest in the Middle East has forced the hand of the Obama administration to reward more permits to drill in the Gulf of Mexico, as they had been dragging their feet for months for no reason. Chevron (NYSE:CVX) was the latest to receive a permit to drill in the Gulf.

The federal government on Thursday approved Chevron Corp. for the first permit for completely new exploration in the Gulf of Mexico, saying the oil company had satisfied requirements to show that it could contain a subsea blowout.

It is the fifth deepwater permit since new standards were put in place after the Deepwater Horizon blowout and spill last year, but the first to drill in a new oil field.

The Bureau of Ocean Energy Management, Regulation and Enforcement issued a revised permit to drill in 6,750 feet of water 216 miles south of Lafayette, La.

Chevron closed Thursday at $105.38, dropping $0.10, or 0.09 percent.





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Exxon (XOM) Resuming Gulf Drilling within weeks

ExxonMobil announced a couple of days after receiving a permit to drill in the deep waters of the Gulf of Mexico that it will begin drilling there in a few short weeks.

ExxonMobil spokeswoman Margaret Ross said, "We have a newly built, state-of-the-art drilling rig standing by and we are prepared to spud the well within a few weeks."

On Tuesday, the US Bureau of Ocean Energy Management, Regulation and Enforcement granted a permit to ExxonMobil to drill a well in the Keathley Canyon Block 919 in 6,941 feet of water, about 240 miles off the coast of Louisiana. It was the fourth of five deepwater permits issued by BOEM since the moratorium was lifted in October.

A spokeswoman for Danish rig owner Maersk said the company had already begun drilling the deepwater exploration well and predicted the job would take five to six months to complete.

But Ross said only staging operations had resumed.

Exxon closed Thursday at $82.73, gaining $0.13, or 0.16 percent.




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Cameron's (CAM) BOP in BP (BP) Gulf Disaster Failed Because of Blind Shear Rams

A government report said the cause of the failure of the blowout preventer made by Cameron International (NYSE:CAM) and related to the Macondo well operated by BP (NYSE:BP), was from the inability of blind shear rams to close and seal the leaking well.

From a report commissioned by the Interior Department and Department of Homeland Security, the conclusion was, "The primary cause of failure was identified as the (blind shear rams) failing to fully close and seal due to a portion of drill pipe trapped between the blocks."

A section of pipe on BP Plc’s Gulf of Mexico well became trapped and kept the blades from cutting the pipe to stop the flow of oil, resulting in the largest U.S. offshore spill.

The blind shear rams, part of a 50-foot stack of valves called a blowout preventer, failed to “fully close and seal” the well, according to the report released Wednesday. The pipe buckled in a blast, which prevented the rams from pinching the pipe shut and allowed oil and gas to surge to the surface.

Cameron International's spokeswoman Rhonda Barnat said, “We continue to work with the industry to ensure safe operations.”

Exxon (XOM) Awarded Gulf Drilling Permit

Exxon Mobil (NYSE:XOM) has finally been approved a permit to resume drilling in the Gulf of Mexico by the Interior Department. It's the fourth Gulf permit awarded since the BP (NYSE:BP) Gulf oil spill.

The company was awarded the permit after it complied with new safety drilling regulations imposed by the department after the Gulf spill, including satisfying the requirement that the company be able to contain a blowout at an underwater well.

Exxon plans to use a containment system from the Marine Well Containment Co, marking the first time that a containment device was approved in a drilling permit.

The permit will allow Exxon to drill a new well in its Hadrian North project in the Keathley Canyon Block, located in nearly 7,000 feet of water about 240 miles off the Louisiana coast.

Exxon closed Tuesday at $82.56, falling $0.28, or 0.34 percent.




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Shell (RDS-A) Gets Okay for Gulf Exploration Drilling

For the first time since the BP (NYSE:BP) oil spill, an oil company has been given approval to drill for natural gas or oil in the Gulf of Mexico, with the Interior Department giving Shell (NYSE:RDS-A) the go ahead.

Interior Secretary Ken Salazar said, "This exploration plan meets the new standards for environmental review and marks another important step toward safer deepwater exploration."

Shell's exploration strategy is for its Auger field located about 130 miles off the Louisiana coastline, which it leases. They want to drill three exploratory wells in approximately 3,000 feet of water.

The Interior Department and the Obama administration have been under fire for dragging its feet on renewing or allowing new permits to give drillers the go ahead to continue drilling or begin new exploration, as in the case of Shell.

Royal Dutch Shell closed Monday at $70.87, up $1.00, or 1.43 percent.

ATP (ATPG) Lands Gulf Deepwater Drilling Permit

ATP Oil & Gas Corporation (NASDAQ:ATPG) has become only the third company to receive a permit to resume drilling in the Gulf of Mexico since the BP (NYSE:BP) oil spill.

They will begin drilling again at the Mississippi Canyon ("MC") Block 941 #4 well in the deepwater Gulf of Mexico.

T. Paul Bulmahn, ATP's Chairman and CEO, said, "This permit for the ATP Titan drilling and production platform is the first for a stationary deepwater facility since deepwater drilling was allowed to resume on February 28, 2011. The previous two permits to drill oil and gas wells approved by BOEMRE in 2011, both of them in the last 18 days, are for wells drilled by Mobile Offshore Drilling Units (MODU). We are ready and eager to return to work. ATP has always drilled safely and environmentally soundly. We are looking forward to delivering on our objectives to generate near-term production growth from these developments."

The Obama administration has been slow and lax in the issuing of permits, causing an enormous amount of pain for companies and workers in the region, as well as the communities they live in.

ATP closed Friday at $18.31, up $0.81, or 4.63 percent.

BP (BP) Settles with Widow of Oil Rig Worker

BP (NYSE:BP) has reportedly settled with the widow of Deepwater Horizon oil rig worker Keith Blair Manuel, who perished when the rig exploded and dropped to the bottom of the Gulf of Mexico.

Per terms of the agreement, U.S. District Judge Carl Barbier of New Orleans today agreed to dismiss Melinda Anne Becnel’s suit against BP in exchange for the settlement.

Terms of the settlement weren't disclosed, which lawsuit didn't include the owner of the oil rig - Transocean (NYSE:RIG).

Claims made by Becnel against BP were also dropped, as well as other oilfield contractors.

This is only one of over 350 lawsuits filed against the oil giant and other companies connected to the Macondo Well.

BP closed Monday at $45.07, down $0.68, or 1.49 percent.

BHP (BHP) Gets Gulf Permit for Shenzi Well

BHP Billiton (NYSE:BHP) has received the second permit to resume drilling in the Gulf of Mexico since the oil spill from the BP (NYSE:BP) Macondo well. BP was a former partner in the well.

A BHP spokesman confirmed the announcement from the Bureau of Ocean Energy Management.

"We are very pleased to be resuming work," BHP spokesman Ruban Yogarajah said.

This follows the first permit issued since the accident, which was awarded to Noble Energy on February 28.

BHP is the operator of the well, with 44 percent ownership. Hess Corp and Repsol are partners, each with 28 percent ownership.

BHP closed Friday at $89.59, up $1.28, or 1.45 percent. Hess closed at $80.18, gaining $1.44, or 1.83 percent. BP was at $45.75, up $0.09, or 0.20 percent.

BP (BP) Says No to Most 2010 Bonuses

Executives at BP (NYSE:BP) who had responsibility connected to operations in the Gulf of Mexico won't be receiving bonuses for 2010, according to the oil giant in its annual report, including former CEO Tony Hayward and Andy Inglis, who had been head of exploration and production at the time.

Current CEO Bob Dudley also decided to not take a bonus for 2010, although a couple of other directors in unrelated units will get bonuses based on performance.

The two receiving bonuses are head of refining Iain Conn and Chief Financial Officer Bryan Grote. Conn will receive a bonus of $170,000, while Grote will receive $207,000. Both met the targets presented to them within their respective divisions.

Bonus decisions for 2010 were mostly based on scale and impact of the Gulf spill, said BP.

BP was trading at $47.91, down $0.30, or 0.62 percent, as of 12:23 PM EST.

Noble Energy (NBL) Lands first Gulf Permit After BP (BP) Spill

Shares of oil driller like BP PLC (NYSE:BP), Transocean (NYSE:RIG), Diamond Offshore Drilling (NYSE:DO), Hess Corp. (NYSE:HES), Marathon Oil Corp. (NYSE:MRO), Chevron Corp. (NYSE:CVX) and ConocoPhillips (NYSE:COP) jumped on the news Noble Corp. was awarded the first deepwater drilling permit since the Gulf of Mexico oil spill.

Contrary to the assertions by the Obama administration, mounting pressure to drill for more oil in the Gulf of Mexico in light of the weak economic conditions and growing unrest in the Middle East played a big part in pushing the permit forward. More permits will be sure to follow as the administration socializes people into gradually accepting the reality.

The well Noble received a permit to drill on in is located in 6,500 feet of water, and which they had started to drill in April 2010, the same month the Deepwater Horizon exploded.

Drilling was suspended in June as a moratorium was imposed upon the Gulf by Obama.

Still No Permits After BP (NYSE:BP) Oil Spill

The Obama administration continues to drag its feet in awarding deepwater drilling permits to companies after the BP (NYSE:BP) oil spill in the Gulf of Mexico.

Michael Bromwich, director of the Bureau of Ocean Energy Management, said, "We are carefully and rigorously reviewing drilling plans. I am quite confident we will again get to the point where we can begin issuing deepwater permits."

When asked about the possible effects from the Libyan and Middle Eastern crisis, U.S. Secretary of the Interior Ken Salazar said it was "not changing at all what we are doing here," and weren't in a hurry to issue permits.

It seem he and Obama better start getting a sense of urgency, as it should have happened long ago on the basis of American oil demand and needs.

Even with a new rapid-response systems in place the Obama administration refuses to grant the drilling permits, suggesting they're attempting to require perfection no human being or company could provide, probably based on political expediency rather than the good of the country.

Noble (NE) Leases Deep-Water Rig to Shell (RDS-A)

Noble Corp. (NYSE:NE), the world’s third- largest deep-water drilling contractor, said it has an agreement to rent one of its idled rigs to Royal Dutch Shell Plc (NYSE:RDS-A) in the Gulf of Mexico.

The Geneva-based owner of 73 drilling rigs also has an agreement to boost the so-called standby rates on three other rigs leased to Shell, Noble said today in a statement. Drilling contractors and operators are negotiating standby rates as a discounted daily rent for rigs that await a U.S. drilling permit in the Gulf of Mexico.

The Jim Day rig, which is capable of operating in water 12,000 feet deep, will earn $156,000 a day through the end of May and will get $242,000 a day until July 31, Noble said. If Shell still doesn’t receive a permit by Aug. 1, the rig would earn a regular rent of $485,000 per day. The rig, which will be contracted through the end of January 2012, may also earn a 15 percent performance bonus.

Noble said Jan. 3 it was “disappointed” that Marathon Oil (NYSE:MRO) Corp. canceled a $752 million, four-year contract for the same rig.





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Transocean (NYSE:RIG) Drops $800 Million on $1 Billion Write-Down

After the explosion on their Deepwater Horizon oil rig in the Gulf of Mexico, which was operated by BP (NYSE:BP), Transocean (NYSE:RIG) has struggled to generate revenue, and was forced to book a $1 billion charge, resulting in a loss of $799 million in the fourth quarter.

For the quarter Transocean had a net loss of $2.51 a share, reversing a profit of $2.24 a share, or $723 million, in the same quarter last year.

Revenue for the quarter dropped 21 percent to $2.16 billion from $2.73 billion.

Excluding charges, adjusted earnings came to 68 cents a share, missing the 88 cents a share estimated by analysts polled by FactSet. Revenue was also lower than the $2.28 billion projected by analysts.

Charges in the quarter came to $1.02 billion, or $3.19 a share, which included $1.01 billion to account for a current and estimated decline in day rates and utilization, and a loss on the retirement of debt.

Separately, Transocean booked expenses of $28 million, or 8 cents a share, in connection to the loss of the Deepwater Horizon oil rig.

BP (NYSE:BP) Close to Launching Offshore Drilling in Libya

Citing the desire of the company to be extra careful after the oil spill in the Gulf of Mexico, along with changing the oil rig they were going to use, BP (NYSE:BP) spokesman Robert Wine said the company is readying itself to begin offshore drilling off the coast of Libya in June; a little later than anticipated.

Wine noted, "We postponed it to do extra checks following the oil spill and also the rig we had lined up we decided wasn't suitable, so we've got another rig.

"Onshore, we've got a rig in place and they are getting ready, so that should get under way shortly."

Originally the company had had plans in place to launch offshore drilling in Libya in 2010.

As to the changing of oil rigs, BP was going to use a rig from Noble Corp. (NYSE:NE), but decided to go with the Deep Ocean Ascension from Pride International Inc (NYSE:PDE) instead.

BP (BP) Says Feinberg Paying Too Much for Claims Victims

Kenneth Feinberg, administrator of the $20 billion escrow fund provided by BP (NYSE:BP) for victims of the Gulf of Mexico oil spill, is now under fire from BP for being "too generous" with how he is figuring out what the final payment will be for many claims.

At issue from BP's perspective is Feinberg's assumption of what future losses will be. BP says there are no facts supporting the future losses assumed by Feinberg.

BP notes Feinberg allows for 70 percent in losses for 2011 and 30 percent for 2012, as measured against 2010 losses. It says there are no facts supporting this and the numbers are being inflated.

On the other side of the spectrum, those wishing to make claims or being rejected for claims they made, have accused Feinberg of not giving his reasoning or the process being too slow.

He has said more than once that a major reason for the pace of the process is the people and businesses attempting to game the system, and the large amount of claimants applying for relief.

While there have been a few cases of the government prosecuting those making fraudulent claims, you would think they would be more aggressive in that pursuit, rather than trying to twist the arm of BP and Feinberg to pay out more than they actually owe.