Business
A Leaner BP is Increasing Exploration in the Gulf
Around the State
BP is a smaller company than it was before the Deepwater Horizon disaster off Florida’s Gulf coast last year.
But with third-quarter net profits of $4.9 billion -- up $1.8 billion from the same period a year earlier -- and plans to shed up to $45 billion in assets in the next two years, BP’s chief executive officer is telling investors the company is back at work.
Now heading a leaner company, BP Chief Executive Officer Bob Dudley, appearing on Bloomberg TV, said the company intends to more than double spending on exploration as it has acquired all its requested permits to drill in the Gulf of Mexico.
“We are getting back to work in the Gulf of Mexico,” Dudley said.
The company, which once pumped 4 million barrels of oil a day worldwide, now sees its focus in exploration, with the peak oil production at 3.4 million barrels a day by the end of the year, Dudley said.
“People have worked very, very hard in the Gulf of Mexico, putting in place voluntary standards for drilling,” he said. “We have received all the permits that we’ve requested. We’ve got three deep-water rigs running now, a fourth one very shortly. By the end of the year, we’ll have five big rigs running.”
David Mica of the Florida Petroleum Council said it’s a good sign that federal deep-water drilling permits are starting to be approved. But he’d like to see the process speeded up.
“There is a slowness of processing of permits that is still a problem,” Mica said.
“If you look to areas like the Dakotas, Pennsylvania and Ohio and Texas, where onshore development is moving forward gangbusters, you see the 'help wanted' sign rather than 'no vacancies' on a lot of employers and that is good news in a time when jobs are so important to the economy.”
Dudley said the current month is seen by the company as a turnaround point in terms of getting finances and the public perception of the company on a sound footing.
“I think our employees ... they’re tired but they’ve done a great job this year and I think we’re starting to see some of the trust come back,” Dudley said. “I think we have done one of the biggest corporate responses to an accident in history.”
BP, which has spent about $25 billion on damage control, has estimated the cost for the entire recovery, along with claims and fines, could reach $42 billion.
A trial is expected to begin in February in New Orleans to establish liability for the April 20, 2010, Deepwater Horizon catastrophe that left 11 dead and pumped 5 million barrels of crude into the Gulf.
Florida is not part of that suit. The state has until April 2013 to file its own lawsuit against BP. Florida officials must seek financial claims against BP under the Oil Pollution Act -- and those claims must be rejected -- before a lawsuit can be brought forward.
Members of Florida’s Revenue Estimating Conference continue to calculate the impact of the spill on Florida’s cities and counties.
Amy Baker, Florida’s chief economist, said most of the revenue impacts won’t be known until the first part of next year.
“The big piece right now is adopting the economic forecast, the pre-oil spill and the post-oil spill economic forecast,” Baker said. “And we’ll be able to use that to run all of our models and revenues.”
Florida’s focus is on government impacts. Currently, the state has reported $12 million combined in impacts from the spill, from areas such as the Escambia County School Board, $363,282; Mid Bay Bridge Authority in Okaloosa County, $407,094; the Bay Medical Center, $1.4 million; and Walton County, $2.4 million.
BP did receive good news last week when Anadarko Petroleum Corp., which had a 25 percent stake in the well, agreed to drop its allegations of negligence by BP.
“We would welcome settlements from others involved, although we’re preparing very, very strongly and heavily for a trial,” Dudley said.
In addition to BP, Transocean Ltd., which owned the rig, and Halliburton Co., which supplied cement for the work, are defendants.
The company has paid compensation claims of approximately $7 billion, out of a $20 billion fund the federal government required it to set up. The money, administered by the federal government, has been going to marine, hotel and tourism interests along the Gulf.
But with third-quarter net profits of $4.9 billion -- up $1.8 billion from the same period a year earlier -- and plans to shed up to $45 billion in assets in the next two years, BP’s chief executive officer is telling investors the company is back at work.
Now heading a leaner company, BP Chief Executive Officer Bob Dudley, appearing on Bloomberg TV, said the company intends to more than double spending on exploration as it has acquired all its requested permits to drill in the Gulf of Mexico.
“We are getting back to work in the Gulf of Mexico,” Dudley said.
The company, which once pumped 4 million barrels of oil a day worldwide, now sees its focus in exploration, with the peak oil production at 3.4 million barrels a day by the end of the year, Dudley said.
“People have worked very, very hard in the Gulf of Mexico, putting in place voluntary standards for drilling,” he said. “We have received all the permits that we’ve requested. We’ve got three deep-water rigs running now, a fourth one very shortly. By the end of the year, we’ll have five big rigs running.”
David Mica of the Florida Petroleum Council said it’s a good sign that federal deep-water drilling permits are starting to be approved. But he’d like to see the process speeded up.
“There is a slowness of processing of permits that is still a problem,” Mica said.
“If you look to areas like the Dakotas, Pennsylvania and Ohio and Texas, where onshore development is moving forward gangbusters, you see the 'help wanted' sign rather than 'no vacancies' on a lot of employers and that is good news in a time when jobs are so important to the economy.”
Dudley said the current month is seen by the company as a turnaround point in terms of getting finances and the public perception of the company on a sound footing.
“I think our employees ... they’re tired but they’ve done a great job this year and I think we’re starting to see some of the trust come back,” Dudley said. “I think we have done one of the biggest corporate responses to an accident in history.”
BP, which has spent about $25 billion on damage control, has estimated the cost for the entire recovery, along with claims and fines, could reach $42 billion.
A trial is expected to begin in February in New Orleans to establish liability for the April 20, 2010, Deepwater Horizon catastrophe that left 11 dead and pumped 5 million barrels of crude into the Gulf.
Florida is not part of that suit. The state has until April 2013 to file its own lawsuit against BP. Florida officials must seek financial claims against BP under the Oil Pollution Act -- and those claims must be rejected -- before a lawsuit can be brought forward.
Members of Florida’s Revenue Estimating Conference continue to calculate the impact of the spill on Florida’s cities and counties.
Amy Baker, Florida’s chief economist, said most of the revenue impacts won’t be known until the first part of next year.
“The big piece right now is adopting the economic forecast, the pre-oil spill and the post-oil spill economic forecast,” Baker said. “And we’ll be able to use that to run all of our models and revenues.”
Florida’s focus is on government impacts. Currently, the state has reported $12 million combined in impacts from the spill, from areas such as the Escambia County School Board, $363,282; Mid Bay Bridge Authority in Okaloosa County, $407,094; the Bay Medical Center, $1.4 million; and Walton County, $2.4 million.
BP did receive good news last week when Anadarko Petroleum Corp., which had a 25 percent stake in the well, agreed to drop its allegations of negligence by BP.
“We would welcome settlements from others involved, although we’re preparing very, very strongly and heavily for a trial,” Dudley said.
In addition to BP, Transocean Ltd., which owned the rig, and Halliburton Co., which supplied cement for the work, are defendants.
The company has paid compensation claims of approximately $7 billion, out of a $20 billion fund the federal government required it to set up. The money, administered by the federal government, has been going to marine, hotel and tourism interests along the Gulf.
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