News has broken this week that BP has finally sealed the ruptured well that led to millions of barrels of oil being leaked into the Gulf of Mexico, which the US government has recently confirmed is the biggest ever accidental release of oil into oceans. Following the release of this news BP’s share price rallied as investors finally breathed a sigh of relief after a five month ordeal.
This is some welcome good news for the company. Since the oil rig exploded on 20th April, where 11 workers were killed, BP’s market capitalisation, the number of shares it has outstanding multiplied by its share price, has fallen by 40%. Further to this, they revealed one of the highest losses in history for a British company, in the second quarter, where they made provisions for up to £20bn for the clean up costs including clean up and compensation. They also declared they were to hold out dividend payments until the end of the year.
BP’s bad summer continued with chief executive Tony Hayward, who has subsequently lost his job albeit by mutual agreement, was heavily criticised by a hostile US congress and BP condemned for corner cutting for money saving purposes in regard to safety procedures.
BP later faced further public outrage when they attempted to spread the blame for the explosion in a report published earlier this month. They referred to the disaster as a “sequence of failures involving a number of different parties”. Among those they deemed responsible were rig owner Transocean and cement contractor Halliburton.
The fallout from this disaster has been spread far and wide. Earlier this summer the special relationship between the USA and the UK was also considered to be under strain with claims that the USA’s attack on BP, formerly known as British Petroleum, were motivated by national identity, claims that Barack Obama vehemently denied.
Stories also emerged that BP had lobbied the Scottish government for the release of the Lockerbie bomber. The allegations suggested that the motives behind this were to help BP secure an offshore deal with Libya.
There has also been a significant environmental impact as images of oiled seabirds were broadcasted across the world. Already thousands of birds, turtles and other species have been found dead along the coast, although in reality it could be years for the full impact on the ecosystem to come to light. Sarah McCulloch from the University of Manchester’s Animal Right’s group remarked how she was “genuinely shocked and appalled” and talked of how BP have “destroyed an entire eco system”. McCulloch also commented on the irony of a conference she had attended hosted by BP where they boasted of their amazing safety record and contribution to environmental causes.
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