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Feel sorry for BP June 16, 2010

Posted by hslu in Economics, Energy, Global Affair, Obama, Politics.
Tags: , , , , , , , ,

I feel sorry for BP’s engineers who have already lost 50% of the value of their 401(k) and their pension may be in danger. Their jobs may be in jeopardy if  BP decide to diversify its deepwater assets.

BP may have to spin off their GoM or US operation and sell it to someone who dare to pick it up. May be China National Oil Company can buy it on the cheap. They have boat (tankers) loads of money and they are anxious to get into the US market. You see about 1/4 of the world oil business is in the US. There is serious money to be made in the United States. Not in the downstream but the upstream!

I am also glad that ExxonMobil wasn’t responsible for the spill.  If it was, ExxonMobil USA may be nationalized by Obama on the day when “Top Kill” failed to “plug that damn hole.” ExxonMobil’s US assets will be liquidated to pay for the damages. All Exxon and Mobil gas stations will change their names to Obama Gas Stations.

Just a week ago Tuesday, I saw  a BP gas station in Vienna closed its door. Many BP gas stations nation wide have reported a 20+% drop in revenue. If this trend continues, many BP gas stations have to close their doors before the leak is stopped.

BP may have to cut its dividend soon, currently at 9.9%, to conserve operating capital. If the first relief well fails to “ply that damn hole” in mid-August, BP may have to declare bankruptcy because BP may run out of money to pay for it. (Sorry I just found out that BP has temporarily suspended the dividend til the end of this year.)

About 12 or 13 years ago when I was still working in the oil industry, I noticed then British Petroleum gradually changed company’s emphasis from technology to “putting on a glossy appearance.” They ran ads on major newspapers and TV to declare BP cared so much about the environment and changed its logo to show that they were a Green company. They down-played their oil business and highlight their involvement in solar energy and other forms of Green energy way before Obama came into the scene.

I commented this observation on BP’s Yahoo BB and voiced my concern on BP’s lack of emphasis on technology which was and still is the central focus of the oil industry. My comments got a lot of negative comments from BP employees.

In a way, I shouldn’t be surprised of this accident because BP has never been known for their technology in our business. In the interest of full disclosure, Mobil wasn’t known for its technology superiority either. That’s why Mobil got bought by Exxon which was and probably still is head and shoulder above everyone else in our business.

Good luck to all BP engineers on your next try to stop this leak.


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