U.S. Sues BP, Other Firms Over Gulf Oil Spill

http://www.dailyfinance.com/story/company-news/u-s-sues-bp-over-gulf-oil-spill/19763830/

The Justice Department on Wednesday sued BP (BP) and eight other companies in the Gulf oil spill disaster in an effort to recover billions of dollars from the largest offshore spill in U.S. history.

The Obama administration's lawsuit asks that the companies be held liable without limitation under the Oil Pollution Act for all removal costs and damages caused by the oil spill, including damages to natural resources. The lawsuit also seeks civil penalties under the Clean Water Act.

"We intend to prove these violations caused or contributed to the massive oil spill," Attorney General Eric Holder told a news conference.

The amount of damages and the extent of injuries sustained by the United States as a result of the Deepwater Horizon Spill are not yet fully known, the lawsuit states.

An explosion that killed 11 workers at BP's Macondo well last April led to oil spewing from the company's undersea well - more than 200 million gallons in all by the government's estimate. BP disputes the figure.

The department filed the suit in federal court in New Orleans.

The other defendants in the case are Anadarko Exploration & Production LP and Anadarko Petroleum Corp.; MOEX Offshore 2007 LLC; Triton Asset Leasing GMBH; Transocean Holdings LLC and Transocean Offshore Deepwater Drilling Inc. and Transocean Deepwater Inc.; and BP's insurer, QBE Underwriting Ltd./Lloyd's Syndicate 1036.

Anadarko and MOEX are minority owners of the well that blew out. Transocean owned the rig that BP was leasing.

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Transocean disputed the allegations, insisting it should not be held liable for the actions of others. "No drilling contractor has ever been held liable for discharges from a well under the Oil Pollution Act of 1990," the company said in a statement e-mailed to The Associated Press. "The responsibility for hydrocarbons discharged from a well lies solely with its owner and operator."

QBE/Lloyd's can be held liable only up to the amount of insurance policy coverage under the Oil Pollution Act and is not being sued under the Clean Water Act.

The lawsuit alleges that safety and operating regulations were violated in the period leading up to April 20.

It says that the defendants failed to keep the Macondo well under control during that period and failed to use the best available and safest drilling technology to monitor the well's conditions. They also failed to maintain continuous surveillance and failed to maintain equipment and material that were available and necessary to ensure the safety and protection of personnel, equipment, natural resources and the environment, the suit charges.

Before Wednesday, potential class-action lawsuits had been filed in the Gulf oil spill by fishing and seafood interests, the tourism industry, restaurants and clubs, property owners losing vacation renters - even vacationers who claim the spill forced them to cancel and lose a deposit. So far, more than 300 suits have been spawned by the spill and consolidated in federal court in New Orleans.

Wednesday's move by the Justice Department follows the Obama administration's decision not to open new areas of the eastern Gulf and Atlantic seaboard to drilling. That marked a reversal from an earlier decision to hunt for oil and gas, an announcement the president himself made last spring three weeks before the spill.

The staff of a presidentially appointed commission looking into the spill has said that the disaster resulted from questionable decisions and management failures by three companies: BP, the well owner and operator; Transocean, the owner of the Deepwater Horizon rig; and Halliburton.

The panel found 11 decisions made by these companies increased risk. Most saved time, and all but one had a safer alternative.

Separately, an administrator is doling out money to Gulf oil spill victims from a $20 billion fund of BP money.

The Justice Department isn't the first government entity to sue BP. Alabama Attorney General Troy King filed federal lawsuits in August on behalf of the state against BP, rig owner Transocean, cement contractor Halliburton Energy Services Inc. and other companies that worked on the ill-fated drilling project.

U.S. District Judge Carl Barbier is presiding over most of the consolidated federal suits. In September, Louisiana Attorney General James "Buddy" Caldwell's office asked Barbier to create a "government case track" to handle government-related suits separately from other claims. The judge hasn't ruled on that request yet.

Other companies that were not targeted by the Justice Department lawsuit could be added later if the department decides that the evidence warrants it.

Among the other companies whose names have emerged in the aftermath of the spill are Halliburton, which handled the cementing of the well; and Cameron International, which made the blowout preventer that apparently failed to stop the gusher after the rig exploded last April 20.

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Supertanker Market Has 30 to 40 Spare Vessels, DnB NOR Says

http://www.bloomberg.com/news/2010-12-14/supertanker-market-has-30-to-40-spare-vessels-dnb-nor-says.html

DnB NOR Markets analysts Henrik With and Glenn Lodden comment in an e-mailed report today on supply and demand for supertankers to load 2 million-barrel cargoes of Middle East crude oil.

Rental income from very large crude carriers, or VLCCs, shipping Saudi Arabian crude to Japan, the industry’s benchmark route, fell 7 percent to $10,232 a day yesterday, according to the London-based Baltic Exchange.

“With approximately 105 VLCC cargoes now being completed for December-loading in the Middle East, this month’s lifting program should for all practical purposes be close to its end. Although January stems could be seen towards the weekend, we do not foresee any surge in fresh demand this week.” Shipbrokers sometimes refer to cargoes as stems.

“As a result of newbuild deliveries and a lack of floating storage impetus, there appears to be an overhang of 30-40 double-hull VLCCs. Charterers are thus in a very strong bargaining position.”

“VLCC earnings should stay poor, and could possibly drop further this week. Asset values continue to decline, negatively impacting” the net asset values of publicly traded shipowners.

To contact the reporter on this story: Alaric Nightingale in London at Anightingal1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net.

Nigeria mulls $250 mln deal to drop Cheney charges

http://www.google.com/hostednews/afp/article/ALeqM5iM5Iocuu7amx4czBr-o-MayQj8kA?docId=CNG.a3cd72112889141b0229f761dc840322.8d1

LAGOS — Nigeria has negotiated a 250 million dollar settlement deal that would see it drop charges against US ex-vice president Dick Cheney and others over a bribery scandal, an official said Tuesday.

The deal reached by officials from Nigeria and energy firm Halliburton, Cheney's former company, must still be approved by the West African country's government, said Femi Babafemi, a spokesman for the anti-graft agency.

"The attorney general of the federation will have to ratify that on behalf of the federal government," he said, adding that a decision would come before the end of the week. The money would be paid "in lieu of prosecution."

Officials told AFP on Monday that the Nigerian government would consider a settlement deal in the case following weekend negotiations in London.

The London talks came after Nigerian authorities charged Cheney and others last week over a bribery scandal linked to construction of a liquefied natural gas plant. Cheney was head of Halliburton before becoming US vice president following 2000 elections.

Babafemi said the 250 million would include some 130 million currently frozen in Switzerland, with the rest paid in fines.

A source close to the case speaking on condition of anonymity confirmed the 250 million total amount, but said 100 million was in Switzerland, while a further 30 million dollars was in Monaco.

Those sums had been paid to an intermediary, but were never passed on as part of the bribery scheme, according to the source.

The case involves an alleged 182 million dollar cash-for-contract scandal over 10 years until 2005 over construction of the liquefied natural gas plant in southern Nigeria.

Others charged included Halliburton CEO David Lesar, as well as Halliburton Inc., its former subsidiary Kellogg Brown and Root (KBR), former KBR head Albert "Jack" Stanley and that firm's current leader William Utt.

Halliburton declined comment, but has previously denied involvement in the allegations. A spokesman for Cheney has dismissed the accusations against him as baseless.

The consortium involved in the gas plant, TSKJ, was also charged. Companies in TSKJ included France's Technip, Snamprogetti (formerly a subsidiary of a company owned by Italy's Eni), KBR and Japan's JGC.

US authorities said last year that Halliburton and KBR had agreed to pay 177 million dollars to settle charges from the Securities and Exchange Commission in the United States over the scandal.

KBR agreed to pay a further 402 million dollars to settle criminal charges brought by the US Justice Department.

Fitch affirms Nigeria's Rivers State at B+/AA-(nga)

http://af.reuters.com/article/nigeriaNews/idAFWLA079720101214

Fitch Ratings has affirmed the Nigerian State of Rivers (Rivers) Long-term foreign and local currency ratings at 'B+' and National Long-term rating at 'AA-(nga)'. The Outlooks are Stable.

The rating affirmation reflects prospects of stable operating performance coupled with the administration's commitment to limit cost growth in a context of increasing debt and abating restiveness in the Niger Delta region.

Easing macroeconomic uncertainties, which led to the revision of the Outlook on the Nigerian Federal Government to Negative in October, together with improving operations may trigger an upgrade if the debt burden remains low and the operating margin strong. Conversely, the ratings might be downgraded if the re-escalation of restiveness in the region hits state revenues, or looser cost control leads to a fall in the operating margin.

Rivers State's budgetary performance remains largely in line with Fitch's expectations despite a larger-than-expected (33%; forecast: 25%) fall in oil revenue to about NGN190bn in 2010. Withdrawals from the Excess Crude Account (ECA) helped supplement federal allocations (FA), leading to non-recurrent proceeds of about NGN70bn in 2009 and NGN27bn in 2010. With the ECA reserves depleted, the state's share of FA in 2011-2012 could be more volatile as the account's ability to act as a shock absorber for fluctuations in oil and prices has been reduced.

The large attacks on oil wells disrupting production in 2009 have diminished following the amnesty programme. However, training and integration of former insurgents may prove lengthy and more costly than anticipated. A resumption of insurgency could inflate overheads and other costs, which in 2009 and 2010 were about NGN33bn per year. Risks remain that recurrent spending could edge closer to NGN100bn in 2011-2012, from about NGN83bn in 2010.

Rivers' commitment to curtail cost growth should help maintain the operating surplus above NGN150bn, 65% of the operating revenue, over the medium term. After pay rises awarded in 2008-2009 to re-motivate and re-professionalise staff, doubling personnel spending to NGN48bn, the wage bill is unlikely to increase significantly above NGN50bn in 2011, despite hiring in the education and health sectors to improve service provision to residents.

Fitch takes comfort from the state's commitment to largely calibrate investment to budgetary surpluses. Although the upgrade of roads, health centres and schools continues, capital spending fell to NGN177bn in 2009 from the peak of NGN225bn in 2008. However, debt-funded investment programmes may push back capital spending close to NGN200bn over the medium term.

A 12-month bridge loan of NGN30bn will translate into debt outstanding of NGN26bn at end-2010. Bond issues have been postponed to 2011 and debt remains below Fitch's projections of NGN200bn by 2012. As borrowing grows, Fitch views positively the state's commitment to develop tax revenue. Although the introduction of a 3% service levy in 2011 on both self-employed and employees may not significantly boost Internally Generated Revenue (IGR), it does help spread the participation of residents into the tax system. At the same time, the completion of the taxpayers' registration is likely to push IGR above the NGN50bn being collected in 2010 and likely double it by 2012, almost covering recurrent costs, including interest expenses. Liquidity remains strong.

Rivers is located in the south of Nigeria with a population of 5 million inhabitants (accounting for about 4% of the national total) mainly employed in subsistence farming. However, the state is one of the richest in the country due to the concentration of oil production. Per capita GDP is about NGN600,000 (EUR3,000; USD4,000).

Reviewing the Gulf Oil Spill: Response and Lessons Learned

WikiLeaks Releases More Revelations about Nigeria

http://www.thisdayonline.info/nview.php?id=189644

•Julius Berger flew Yar’Adua from Germany to S’Arabia •Turai, Tanimu named in oil deals •Fresh allegations against Aondoakaa •How Shell, others tried to subvert oil sector reform bill

From Tokunbo Adedoja in New York with agency reports, 12.09.2010

Construction giant, Julius Berger, made its aircraft available to the late President Umaru Musa Yar’Adua to be flown from Germany to Saudi Arabia in September 2008, the latest diplomatic cables published on the whistle-blowing website, WikiLeaks, revealed yesterday.

The cable, written by former US Ambassador to Nigeria, Dr. Robin Sanders, quoted Shell's regional executive vice-president for Africa Ann Pickard as making the disclosure while discussing Yar’Adua’s health at the time.

The cable read: “Pickard agreed that the President's health is a guessing game. She said that in her recent meetings with Yar'Adua he seems alert but drawn in the face and frail. She reported that a Julius Berger (protect) contact says that the President was not in danger of dying soon but has serious ailments from which he will never fully recover.

“Pickard shared that Berger provides transportation including planes for the President and has reportedly flown in doctors and technicians to attend the President (reftel). She said, for instance, that her Berger contact confided that they flew the President from Germany to Saudi in September 2008. Additionally, the Berger contact thought the President would not return to the Villa offices, as they were moving the President's personal things out of the Villa.”

Other revelations from the latest cables, four of which were published yesterday, are:

•Pickard said a lot of “interesting” people were lifting oil even with no knowledge of the industry, suggesting a series of corrupt practices.

•A businessman and close associate of the late president was accused of smuggling but was said to have been told by Yar’Adua to clean up his act. He was called Yar’Adua’s “Mr. Fix It”.

•International Oil Com-panies (IOCs) have been making moves to influence the contents of the Petroleum Industry Bill (PIB) to suit their purpose.

•Former Attorney-General of the Federation, Chief Michael Aondoakaa, was accused of demanding gratification before signing documents.

Sanders’ dispatch read: “Pickard said that Nigerian entities control the lifting of many oil cargoes and there are some "very interesting" people lifting oil. Oil buyers would pay NNPC GMD Yar'Adua, Chief Economic Advisor Yakubu and the First Lady Turai Yar'Adua large bribes to lift oil. Pickard also reported an instance of the Attorney General Aondoakaa allegedly soliciting a $20 million bribe to sign a document. The International Oil Companies (IOC) are quite concerned about the "very flawed" new petroleum sector energy bill. The IOCs will be asking U.S., Dutch, and U.K. COMs to convey points on the bill to GON policymakers.

“Pickard said that Nigerian entities control the lifting of many oil cargoes and there are some "very interesting" people lifting oil (People, she said that were not even in the industry). As an example she said that oil buyers would pay Nigerian National Petroleum Corporation (NNPC) General Managing Director Yar'Adua, (Note: not related to President Yar'Adua. End Note) Chief Economic Advisor Yakubu, and the First Lady Turai Yar'Adua large bribes, millions of dollars per tanker, to lift oil. The IOCs control the liquefied petroleum gas (LPG) cargos, so GON actors do not have the same opportunity for illicit gain. Pickard also said a former associate of hers (protect) had told her he had been present when Attorney General Aondoakaa had told a visitor that he would sign a document only if the visitor paid $2 million immediately and another $18 million the next day.”

Political Counsellor Walter Pflaumer who worked in the US embassy sent a cable on the alleged close relationship between businessman, Alhaji Dahiru Mangal, and Yar’Adua.

Pflaumer did not disclose the identity of his close, writing: “XXXXXX alleged a close association between President Yar,Adua and Katsina native and rumored smuggler Dahiru Mangal. XXXXX claimed Mangal is the President's "Mr. Fix It," taking care of "anything filthy" Yar'Adua needs done in addition to smuggling items for several wealthy Nigerian businessmen through Niger into Kano. Another Kano business contact corroborated XXXXXX 's allegations, but observed that Mangal no longer deals openly in illicit activity since Yar'Adua named him a special advisor earlier this month.

“Kano real estate entrepreneur and longtime Mission contact XXXXXX told PolOff February 10 that Katsina native Dahiru Mangal, who XXXXXX contends deals in illicit smuggling of goods into Nigeria, is also known as President Yar'Adua's "Mr. Fix It." XXXXX alleged a close association between the President and Mangal, dating to the former's tenure as governor of Katsina, and claimed the latter remains to this day Yar'Adua's "go-to man" to accomplish "anything filthy that Yar'Adua needs done."

“Mangal, XXXXX said, is also the "go-to" for any wealthy Nigerian, who wants to import "just about anything" into Nigeria. He declined to state whether Mangal smuggled weapons, drugs, or persons into Nigeria.”

On October 20, 2009, Deputy Chief of Mission Dundas McCullough wrote: “Pickard said the GON [government of Nigeria] wanted the National Assembly to pass the [PIB] by November 17 in order for the GON to be able to announce it at the upcoming CWC Gulf of Guinea Conference in London November 17-19. She said that if the House passes the PIB in the coming weeks, “we need to move quickly” to obtain any necessary changes before it becomes law. Fortunately, she added,

“We are working with the House and the House appears to want to work with us.” She continued that if the Senate passes the PIB, “We aren’t worried.” Unfortunately, she explained, “We think the Senate will pass a bad bill” but it won’t really matter. She added that she would be at the Nigerian House and Senate later that day and would let the Embassy know if there were any unexpected developments.

“3. (C) The Ambassador asked if Shell had had engagements with the GON outside the National Assembly, such as with the Ministry of Finance and the Central Bank of Nigeria. Pickard said, “We are meeting with them at all levels.” She noted that an IMF team headed by Charles McPherson was in Abuja to look at the PIB and that Shell would be meeting with them as well. In contrast, she said, “We are worried about the World Bank’s political agenda and it is not clear what their agenda is.” She said the World Bank was working on how to make the IJVs “bankable” so that they would be able to go to international and domestic banks for financing.”
Efforts to reach Tanimu and Aondoakaa last night were unsuccessful as calls to their phones were unanswered.

Platts to acquire Oil Price Information Service

http://www.bloomberg.com/news/2010-12-08/platts-to-acquire-oil-price-information-service.html

NEW YORK (AP) — McGraw-Hill Companies Inc. said Wednesday that its Platts energy and metals division will acquire the Oil Price Information Service from United Communications Group.

Terms of the deal were not released. The acquisition is expected to be completed in the first half of 2011.

The Oil Price Information Service, based in Gaithersburg, Md., monitors wholesale and retail petroleum markets in North America.

McGraw-Hill shares added 17 cents, to $36.08 in midday trading Wednesday.