Ayesha Rascoe REUTERS NEWS AGENCY
WASHINGTON—British energy giant BP Plc’s stock price plunged to a 14-year low in U.S. trading Wednesday as the Obama administration threatened to impose new penalties on it over the worst oil spill in U.S. history.
BP depositary shares trading in New York fell nearly 16 per cent to close at $29.20, their lowest level since August 1996, on growing worries about the costs the energy giant will have to assume.
U.S. Interior Secretary Ken Salazar told a Senate hearing he would ask the British oil giant to repay the salaries of any workers laid off because of the six-month moratorium on deepwater exploratory drilling imposed by the U.S. government after the spill.
BP’s total bill so far, including cleanup costs, has reached $1.25 billion and the U.S. government has already said it will have to pay billions more in penalties.
The White House echoed Salazar’s comments.
“The moratorium is as a result of the accident that BP caused. It is an economic loss for those workers, and ... those are claims that BP should pay,” White House spokesman Robert Gibbs told a briefing.
“We believe it’s an economic damage caused by this, not unlike losing business at your bait and tackle shop.”
Earlier, the company’s stock closed down 4 per cent in London on concerns the company might have to suspend its dividend payment. U.S. politicians have been calling for this, saying the company should put its cash into paying for legal claims and environmental damage in the Gulf.
Meanwhile, BP plans to bring in an oil-burning device and a tanker from the North Sea as it tries to contain the crude spewing into the Gulf of Mexico, a disaster creating headaches for people who make their money off the sea and those processing their claims of financial loss.
The current oil containment system is catching 2.4 million litres daily, Coast Guard Adm. Thad Allen said at a news briefing in Washington. Officials had previously cited that figure as the system’s general capacity, but Allen said officials now believe it can handle 2.86 million litres gallons daily.
Even so, there’s still more oil eluding capture. BP is bringing in a second vessel that will increase capacity, as well as the North Sea shuttle tanker, which will assist in the transport of the oil, and a device that will burn off some of it. The company previously said it plans to switch out the current containment cap with a slightly larger one that will seal better and trap more oil.
The government is also keeping an eye on how BP is reimbursing people for their losses in the Gulf. Allen has written to BP CEO Tony Hayward demanding “more detail and openness” about how the company is handling mounting damage claims, reminding the beleaguered executive that his company “is accountable to the American public for the economic loss caused by the oil spill.”
Allen has noted that “working claims is not something that’s part of BP’s organizational competence.”
http://www.thestar.com/news/world/article/821417--bp-shares-plunge-as-u-s-threatens-new-penalties
I am in full agreement with U.S. Interior Secretary Ken Salazar and Robert Gibs on how BP should resolve the problem. Already they have experienced a 16% drop in their trading shares and should also assume responsibility for the economic distress they are bringing upon all their workers. The smartest thing for BP to do right now, as many U.S. politicians have pointed out, would be to save money for paying to resolve the environmental damage which has resulted in lost jobs for those in fishing industries and such, as well as furry of the environmental damage itself. As well, they need to put away money to pay laid-off workers as well as other legal claims. The sooner they do this the better as there is already much anger and frustration towards the oil company and they need to take control over the situation by firstly recompensing workers who were laid off.
ReplyDeleteFrom reading this, it is clear they are making a good effort to stop the 2.4 million liters a day that’s spilling in the Gulf. Still though, I do like the position the White House is taking in keeping a close eye on how BP is working to repay their employees and holding them accountable for "the economic loss caused by the oil spill”. I felt this was a government related issue as it deals with the White House’s and President Obama’s approach to deal with the desperate situation in the Gulf. The government is finally getting involved but I would like to see more government interference in the matter as the issue is going out-of-hand and needs to be taken over by federal security as it will have consequences for all of America as well as other countries too.
It is not a surprise that BP's trading shares have dropped since the oil spill. But BP should take some initiative in this problem. I'm in total agreement with Natalie and the U.S on this argument. Some thing needs to be done before this oil spill gets more out of hands and kills everything on it's path.
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