After a somewhat disappointing performance in the last quarter, Transocean (NYSE:RIG) decided it was time to point to their contract with BP (NYSE:BP) and how it protects them from the majority of claims and lawsuits which are being leveled against BP.
In a required regulatory filing with the U.S. Securities and Exchange Commission, Transocean cited their contract, which evidently entails about 400 pages, saying it protects the company the majority of damages resulting from the Deepwater Horizon explosion that led to the oil leaking into the ocean, and loss of 11 workers.
One are it doesn't protect them in is with nine of the workers, who had worked for Transocean. The remaining two that perished in the accident worked for BP.
This is important for Transocean, and the reason they bring it up at this time is a form of guidance for their shareholders and potential investors.
If it isn't clear as to the level of liability faced by Transocean in the Macondo oil well disaster, most will sit on the sidelines until that becomes clearer.
Transocean is attempting to eliminate that potential scenario by pointing to the terms of the contract, which others feel that have a solid case for.
Others like Anadarko Petroleum (NYSE:APA) and Mitsui (Nasdaq:MITSY), while under different contracts, are also waiting things out before committing to paying any funds. They'll probably wait for the final determination as to whether or not BP is identified as reckless in the matter, which could be a strong impetus for them to continue to resist paying the bills BP is sending them, and fight it out in arbitration, which the contracts call for, or possibly in court if they have to.
Showing posts with label Liability. Show all posts
Showing posts with label Liability. Show all posts
Thursday, August 5, 2010
Friday, June 18, 2010
Transocean (NYSE:RIG) Looking Better on Decreased Liability Outlook
Some of the oil companies that had connections to the Gulf oil spill are starting to gain back share price they had lost, including Transocean (NYSE:RIG), as BP (NYSE:BP) continues to look like the oil company which will be by far the most liable in the situation.
"One of the big uncertainties was trying to decipher the fault and legal liability, and when that was unclear, people took everyone and anyone involved out to the woodshed on this," Sterne Agee analyst David Havens said. "It's becoming more and more clear that BP owns the majority of the liability."
The growing realization that market could have overreacted to the oil sector as a whole, and some of the oil companies involved in the Deepwater Horizon oil rig and well, has caused formerly spooked investors to return, has some of the share prices gaining back some of the share price.
Much of this is the result of documents obtained which point to BP (NYSE:BP) making some bad decisions which led up to the disaster, although absolute proof of what happened has yet to be determined.
Transocean was up over $4.00 a share, or 8 percent as of 2:05 PM EDT.
"One of the big uncertainties was trying to decipher the fault and legal liability, and when that was unclear, people took everyone and anyone involved out to the woodshed on this," Sterne Agee analyst David Havens said. "It's becoming more and more clear that BP owns the majority of the liability."
The growing realization that market could have overreacted to the oil sector as a whole, and some of the oil companies involved in the Deepwater Horizon oil rig and well, has caused formerly spooked investors to return, has some of the share prices gaining back some of the share price.
Much of this is the result of documents obtained which point to BP (NYSE:BP) making some bad decisions which led up to the disaster, although absolute proof of what happened has yet to be determined.
Transocean was up over $4.00 a share, or 8 percent as of 2:05 PM EDT.
Thursday, June 10, 2010
BP (NYSE:BP) Ready to do Battle over Liability
Saying there is a point where a line has to be drawn, an unnamed BP (NYSE:BP) source told Reuters they are preparing for a possible battle with the Obama administration over the growing demands related to the oil spill.
If the company wants to survive, this is inevitable, as the administration is trying to cast the costs of the moratorium they made on drilling in the Gulf onto BP, which is ludicrous at best.
This is partly in response to the comments U.S. Interior Secretary Ken Salazar made at a Senate hearing where he said he was going to ask that BP pay for the lost wages of workers laid off because of Obama's decision.
I wouldn't give in one inch on this if I were BP, as they have no responsibility to pay for what is increasingly seen as an over-response by Obama to the situation.
BP has rightly stated all along they would pay for clean-up and damages related to the oil spill, including loss of revenue of fisherman and others directly affected.
But to have to pay for things like the consequences of the moratorium on oil drilling, which could be extended for an even longer period of time, is viewed as excessive, and will probably be fought by BP.
According to the source, "At some point a line has to be drawn."
Growing resistance and outrage over the moratorium is what is the root of this, and now the administration is attempting to pass the costs of the decision onto BP.
The problem from the point of view of Obama responding to the disaster is it seems he and his advisers are unable to look at the overall picture and make decisions based on the many variables involved.
His lack of experience in governing has really been exposed in this crisis, and now he's trying to save face by not backing out of the moratorium by passing costs onto BP, which if he sticks taxpayers with it, will be very unpopular, and if they were to go on the unemployment rolls, would make Obama and the Democrats even look worse, as the numbers of the unemployed would increase.
If the company wants to survive, this is inevitable, as the administration is trying to cast the costs of the moratorium they made on drilling in the Gulf onto BP, which is ludicrous at best.
This is partly in response to the comments U.S. Interior Secretary Ken Salazar made at a Senate hearing where he said he was going to ask that BP pay for the lost wages of workers laid off because of Obama's decision.
I wouldn't give in one inch on this if I were BP, as they have no responsibility to pay for what is increasingly seen as an over-response by Obama to the situation.
BP has rightly stated all along they would pay for clean-up and damages related to the oil spill, including loss of revenue of fisherman and others directly affected.
But to have to pay for things like the consequences of the moratorium on oil drilling, which could be extended for an even longer period of time, is viewed as excessive, and will probably be fought by BP.
According to the source, "At some point a line has to be drawn."
Growing resistance and outrage over the moratorium is what is the root of this, and now the administration is attempting to pass the costs of the decision onto BP.
The problem from the point of view of Obama responding to the disaster is it seems he and his advisers are unable to look at the overall picture and make decisions based on the many variables involved.
His lack of experience in governing has really been exposed in this crisis, and now he's trying to save face by not backing out of the moratorium by passing costs onto BP, which if he sticks taxpayers with it, will be very unpopular, and if they were to go on the unemployment rolls, would make Obama and the Democrats even look worse, as the numbers of the unemployed would increase.
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