Archive for June, 2010

BP chief won’t quit over Gulf of Mexico spill (AP)

Sunday, June 6th, 2010 | Finance News

LONDON – BP PLC chief executive Tony Hayward said Sunday he won't step down over the Gulf of Mexico oil spill, and predicted his company will recover from the disaster.

Hayward told BBC television's "Andrew Marr Show" that he would not quit, and he had the "absolute intention of seeing this through to the end."

"We are going to stop the leak. We're going to clean up the oil, we're going to remediate any environmental damage and we are going to return the Gulf coast to the position it was in prior to this event," Hayward said. "That's an absolute commitment, we will be there long after the media has gone, making good on our promises."

The executive said a containment cap placed on the blown-out well in the Gulf had collected about 10,000 barrels of oil over the last 24 hours, and that BP hope a second containment system will be in place by next weekend.

"When those two are in place, we would very much hope to be containing the vast majority of the oil," Hayward said. He said the new containment operation is designed to "be essentially hurricane proof."

Hayward said the spill was a one-in-100,000 to a one-in-a-million occurrence. "In this accident, based on what we understand so far, seven layers of protection were breached," he told the BBC.

But Hayward rejected claims that the incident showed oil companies were now operating beyond their technical capacity.

"That's of course a very valid concern," he said. "It's also worth just highlighting the industry has been exploring in the deep water for over twenty years and it has not had to contend with an incident of this sort before."

He said that "what has to happen on the part of the industry — and certainly BP — is to move safety standards to a completely different level."

Hayward confirmed he has not held direct talks with President Barack Obama over the incident, but said the "working relationship between BP and the federal agencies involved in this has been exemplary."

He said his company had been left devastated by the disaster, but said BP would survive, and has the "wherewithal to weather this storm and come back strongly."

"BP is a very strong company, its operations today are running extremely well. It's generating a lot of cash flow, it has a very strong balance sheet. Our reputation has been based on thousands of people, over a long period of time, in BP doing the right thing, and were are doing everything we can to do the right thing," he said.

Hayward declined to say whether it would pay a dividend to shareholders scheduled to be paid at the end of July, insisting the decision would be taken by BP's board at the end of next month.

"We have to take care of our Gulf Coast stakeholders. We have to take care of our investors. We have to take care of our employees, our retirees. We're going to take care of all of our stakeholders," he said.

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Crunch vote looms for Swiss-US deal in UBS tax row (AP)

Sunday, June 6th, 2010 | Finance News

GENEVA – The Swiss government is hoping to rid itself of a long-running headache over banking secrecy Tuesday when lawmakers are expected to approve a treaty to hand files on thousands of suspected tax cheats to U.S. authorities.

A standoff among lawmakers, courts and the government has held up ratification of the deal that Swiss and U.S. authorities signed in August to lift the threat of U.S. prosecution from Switzerland's largest bank, UBS AG.

The hoped-for resolution may yet be stalled as members of the nationalist Swiss People's Party and the left-of-center Social Democrats demand concessions in return for their consent.

The debate in Switzerland's lower house — or National Council — starts Monday.

If the option favored by government and centrist parties is passed it would spell the end of UBS's three-year battle with U.S. tax authorities that culminated in revelations the bank had for years helped American clients hide millions of dollars in offshore accounts.

Social Democrats have said they will only agree if the government makes a binding commitment to tax bankers' bonuses. Such a tax is opposed by the powerful People's Party, which instead wants the deal with Washington put before voters in a national referendum — a nod to Switzerland's unique system of grassroots democracy that could further delay passage of the agreement. Support of at least one of the two parties is necessary for a parliamentary majority.

The deal is crucial to UBS, which has faced intense pressure from U.S. authorities since 2007. Last year the bank agreed to turn over hundreds of client files and pay a $780 million penalty in return for a deferred prosecution agreement. But Washington has signaled that unless UBS reveals a further 4,450 American names demanded in the U.S.-Swiss agreement, it may face a crippling civil investigation just at a time when the bank is recovering from the subprime crisis and seeking to rebuild its U.S. business.

A parliamentary report publishedheavily criticized the cabinet for its handling of the UBS affair and suggested that at one point the bank was in such deep trouble a foreign buyout was being considered.

The deal goes far beyond other compromises Switzerland has made in recent years to fend off demands by Germany, France, the United States and others for an end to its treasured banking secrecy rules. Last year the government agreed to do away with the difference between tax evasion and tax fraud — a key legal distinction that has allowed foreigners with accounts in Switzerland to avoid having their details handed over to investigators back home.

Even if the vote passes in the government's favor, Swiss banking secrecy already faces a new threat.

Credit Suisse, Switzerland's second-largest bank, said in April that it believes client files were stolen from its computers and handed over to German authorities, who are now investigating possible tax evasion.

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Apologetic BP ads get criticism, not sympathy (AP)

Sunday, June 6th, 2010 | Finance News

MIAMI – An apologetic advertising campaign by BP for causing the biggest oil spill in U.S. history has earned the company more criticism than sympathy as the pollution spreads across the Gulf Coast from Louisiana into Alabama and Florida.

The new radio, TV, online and print ads feature BP CEO Tony Hayward pledging to fix the damage caused by a gusher of crude oil unleashed by an April 20 drilling rig explosion that killed 11 people. He says the company will honor claims and "do everything we can so this never happens again."

The ads, which began appearing last week have been criticized by President Barack Obama, who said the money should be spent on cleanup efforts and on compensating fishermen and small business owners who've lost their jobs because of the spill, and to help residents and visitors of the Gulf Coast, where some beaches have been blackened by the oil and others remain threatened.

"Their best advertising is if they get this cap (in place) and they get everything cleaned up. All you've got to do is do your job and that's going to be plenty of good advertising," said Grover Robinson IV, chairman of the Escambia County Commission in the Florida Panhandle. He was referring to BP's efforts to place a cap over the gushing pipe to capture some of the flow of oil.

BP PLC spokesman Robert Wine said in an e-mail Saturday that "not a cent" has been diverted from the oil spill response to pay for the ad campaign. He said he didn't know its cost.

"All available resources are being deployed and efforts continue at full strength," he wrote. BP estimates that it will spend about $84 million through June to compensate for lost wages and profits caused by the spill. The company has promised to pay all legitimate claims and no claim has yet been rejected, Wine said.

Shortly after the one-minute television and online version of the ad begins, Hayward speaks to the camera, saying "The Gulf spill is a tragedy that never should have happened."

Hayward then narrates over images of boom laid in clear water before uncontaminated marshes and healthy pelicans. Cleanup crews walk with trash bags on white sand beaches as he touts the oil giant's response efforts: more than 2 million feet of boom, 30 planes and more than 1,300 boats deployed, along with thousands of workers at no cost to taxpayers.

The ad's imagery clashes with disturbing news photographs published recently of pelicans coated in oil, some immobilized by the gunk, others struggling with crude dripping from their beaks and wings.

"To those affected and your families, I'm deeply sorry," Hayward says in the ad.

As the ad fades out to show BP's website and volunteer hot line, he says, "We will get this done. We will make this right."

In the Florida Panhandle, the ads have been received about as well as the sticky tar balls and rust-colored froth that began washing ashore Friday.

Picking up tar Saturday with her parents on Pensacola Beach, 13-year-old Annie Landrum of Birmingham, Ala., called Hayward's apology a joke.

"It's a lame attempt a month and half after the disaster. It's too late," she said.

Public-relations experts said BP's ad blitz seems premature and a little shallow. BP missed an opportunity to shift focus away from criticism of the company and toward BP's strategy for cleaning up the spill, said Gene Grabowski, a senior vice president with Levick Strategic Communications.

"The one element they seem to be missing is laying out a plan for what they're going to do. Usually in ads like these you apologize; he's doing that in the ad. You talk about your resolve to fix the situation; that's also included. But what's missing is a concrete plan or vision for what they plan to do next," he said.


Associated Press writers Jordan Robertson in San Francisco, Bill Kaczor in Pensacola, Fla., and Melissa Nelson in Pensacola Beach, Fla., contributed to this report.



The BP video:

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