BP Headed to Toilet

SUBHEAD: Junked! Or would BP be happy to privatize the gains and socialize the losses? Image above: BP station damaged in Proserpine, Australia, by cyclone Ului on 3/21/10. From (http://www.wunderground.com/blog/JeffMasters/comment.html?entrynum=1451&tstamp=&page=16). By Associated Press Staff on 15 June 2010 in Huffington Post - (http://www.huffingtonpost.com/2010/06/15/bp-downgraded-by-fitch-ov_n_612380.html) An influential ratings agency downgraded BP on Tuesday because of worries about the continuing Gulf of Mexico spill, sending the oil company's shares to a new low.

Shares in BP fell below 350 pence for the first time since the oil rig disaster, dropping 2.5 percent to 346 pence ($5.12) by midafternoon on the London Stock Exchange.

Fitch Ratings downgraded BP's long-term issuer default rating and senior unsecured rating to BBB from AA.

"The scale of today's rating action has been partly driven by the increased risk that the balance between long-term and near-term cost payments may now be skewed much more heavily toward the near term than previously anticipated," Fitch said.

The ratings company said it was concerned by reports from U.S. government scientists that the volume of the spill was significantly larger than previously indicated, and it was also worried by pressure from U.S. officials on BP to pay billions of dollars into an escrow account to guarantee payment of cleanup costs.

"Both of these events have a direct bearing on BP's fundamental financial flexibility," Fitch said.

On Monday, shares fell 9 percent in London and 10 percent in New York as the company remained under intense pressure to stop the catastrophic leak of oil from a well in the Gulf of Mexico.

BP has lost 45 percent of its value since the April 20 explosion at the Deepwater Horizon rig in the Gulf of Mexico that killed 11 workers and set off the worst oil spill in history.

A Word to BP Shareholders By Harry Shearer on 14 June 2010 in Huffington Post - (http://www.huffingtonpost.com/harry-shearer/a-word-to-bp-shareholders_b_612362.html) The British media have been ablaze with patriotic defensiveness, upset that President Obama keeps calling BP "British Petroleum". Strange: I was at the Tate Britain museum yesterday, visiting galleries sponsored by...BP. The London Olympics have as a main sponsor...BP. Seems pretty British to me.

The media, and the Prime Minister, have also been insistent about the economic importance of BP to...Britain. The figure floating around suggests that a significant amount of pension-fund income in Britain each year comes from BP. Although it's not British, you recall. And then they point out that almost 49% of BP shares are owned by Americans, and that BP grew to its mammoth size by merging with Amoco, an American company, mainly to gain control of Amoco's operations in, of all places, the Gulf of Mexico.

So, okay, a message to BP shareholders, be they Brits, Americans or none of the above. You benefited through the years from the profits generated by the company which accumulated 97% of the fines levied against oil companies for safety and environmental violations (not counting Exxon Valdez compensation).

You gained financially from the damage your company inflicted on its workers and its surroundings. Now your company, following those same policies, has created enormous economic and ecological damage, and you are concerned about the impact that unlimited liability for that damage would have on your dividend and on the ability of your company to avoid bankruptcy.

Question: how many of you complained to management about the policies and practices from which you benefited all these years? Or do you just complain when these policies and practices inflict profound economic and other costs on others, for which your company may be held responsible? Did you complain when management obviously low-balled flow estimates out of the well for at least a month, so as to minimize damage perceived by the potential jury pool?

Or, as seems more likely, are you happy to privatize the gains and socialize the losses?


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