BP is holding a stockholder conference call: Will spin off the Gulf situation into a new division

[Robbien]

The Guardian is blogging the event:

2.18pm: Some analysts have argued that the crisis may force BP to be broken up - Hayward is trying to calm these fears. He confirms that BP has now spent more than $1bn on the clean-up, and warns that the eventual damages claims will be "sizeable".

Hayward also announces that BP are going to spin off the Gulf of Mexico situation into a new division (called Bad BP, perhaps). It will be run by Bob Dudley, a well-respected BP executive who used to manage its Russian arm (until he fell foul of the Kremlin).

" I don't believe we could have a better person to lead this organisation," says Hayward. "This will remain my number 1 priority for as long as necessary"

2.17pm: So what's the long term solution? Hayward says the oil industry needs a "paradigm shift".

"We need better safety technology. For example, the Blow Out Preventor, which this incident has shown is not failsafe."

2.12pm: It's too early to say where the fault lies - a lot remains unknown, says Hayward. He explain that BP has drawn up a four-point plan:

1) It will be "transparent with the US government and the US people" in what it does and says
2) It will meet responsibilities to those who have suffered economic harm
3) It will make good "in full" the environmental impact of the disaster
4) It will invest in creating a safe Gulf of Mexico oil industry.


You can follow along at:
http://www.guardian.co.uk/business/2010/jun/04/bp-chief-executive-faces-investors-gulf-oil-spill

[charlesg]

1. The hydra will live and prosper

[dipsydoodle]

2. Good find.

:thumbsup:

[Robbien]

3. 2.28pm: Morgan Stanley wants more information about the dividend

(which makes up about a seventh of the overall dividend payment from FTSE 100 countries).

"Our first responsibility is to fix this disaster....but we need to strike a balance with our obligations to shareholders," he says. Is that a hint that the dividend is going to be cut?

[Greyskye]

4. First step in protecting their assets?

:tinfoilhat:

[dixiegrrrrl]

16. Absolutely.

And, if I may blow my own horn, they are doing what I said last week they would do.
PG&E did same thing in Ca. after the energy/Enron rip-off. All payments went to headquarters,
all debts stayed in the spin-off company, which claimed it had no income to pay the court costs and fines and etc.

[dipsydoodle]

21. Bit different in this case

BP America is a wholly owned subsidiary of BP plc. They didn't say they'd split it off - they mentioned renaming the Gulf section. In reality plc has no means of spliting it off anyway since BP America provides 25% of BP plc's profits. BP America contibutes c. US$50bn p.a which is twice what, according to latest figures, is considered to be BP's exposure on this @ US$ 25bn.

[dixiegrrrrl]

23. as quoted form the article which quoted the call

"Hayward also announces that BP are going to spin off the Gulf of Mexico situation into a new division".

A "new division" is more than a "re-name".

[dipsydoodle]

24. It would still be wholly owned subsidiary

of BP plc and hence indivisible. They would do that for internal accounting purposes. That's necessary to be able to show in the consolidated accounts what is actual worldwide profit and what is the loss offset to that due to the Gulf. Its an accounting requirement over which they have no real control in the same way that US companies have no control over GAP requirements.

[Dappleganger]

5. CYA All the Way, Baby!

[trof]

6. I've suffered economic harm. I'll never see a BP nickel.

My home is 5 1/2 miles from the Alabama coast.
Would YOU buy my house?
I didn't think so.
:-(

[myrna minx]

7. K&R n/t

:puke:

[Robbien]

8. 2.39pm: Barclays Capital wants to know what assessment BP has made on the Clean Water Act

He does not like to speculate on how big a fine it might be. Under the Act, any fine would be much larger if BP were found guilty of gross negligence. One expert recently estimated BP could be hit by a $60bn fine, although that is a very worst-case scenario.

[Tommy_Carcetti]

9. Conference call in 15 minutes! nt

[dipsydoodle]

10. ?

.

[SidDithers]

13. AsherHeimermann, is dat you?...nt

Edit: corrected name :)

Sid

[Robbien]

11. This is nuts, the cap they are talking about today won't be working til mid July

2.53pm: . . .

The key, apparently, is that BP has developed a new better way of collecting the oil that will be corralled by the container system and then transported to the surface in a pipe. This new system, which will be working by mid July, is much more hurricane resistant. It is based on a 'submersible riser" which will offer "very rapid connect and disconnect capabilities".

[dipsydoodle]

14. I think you may find

that's a later upgrade of whatever they're doing at present.

[Robbien]

18. Yes but what they are doing at present

once completed, isn't supposed to capture the majority of the oil until the upgrade.

At least that's what I've been reading.

[dipsydoodle]

19. Yes

but his answer was in response to the hurricane issue and hence he mentioned additional work to follow which would be better able to cope. I'm not a deep water engineer and have no knowledge of the problems associated with running a new pipe down nearly a mile to the sea floor.

[Urban Prairie]

12. Yeah, it may be called the Special Spin Spew Spill Spread Speculation Spoiler Spinoff n/t

[DevonRex]

15. So they're limiting what assets the US can seize. Assholes. nt

[me b zola]

17. Could they have done this if they were already in receivership?

MoFos.

[Mira]

20. It is evil. Predictable evil. Recommended N/T

[dhpgetsit]

22. Yes, they will isolate their losses.

This division will be bankrupted but BP shareholders will not be affected.
This is how losses are socialized while profits are kept private.

[Statistical]

25. A dvision isn't a seperate company.

If the division is bankrupt then shareholders would be affected.

[dipsydoodle]

26. Correct

but some here don't seem to understand that. Apart from that companies cannot bankrupt a division which is a wholly owned subsidiary.

[Gin]

27. I agree.....next shoe to drop will be the "new division" has no funds

and we will be on the hook for the cleanup.....

I think a new division has a budget...and even though the parent is BP...we won't get blood out of that stone once the budget is gone....it will be a stand alone entity...

[Statistical]

28. On what planet is that possible.

It would be like you have a million dollars in one checking account but file for bankruptcy because they over checking account is over-drafted. Then judge says sure all your debts are gone and have fun with the cool million.

:rofl:

[City Lights]

29. Their new division should be "BP FUBAR" nt