A report from a former FBI director has concluded that BP has a bit of a case over its Deepwater Horizon payments. The energy giant had alleged fraud—kickbacks, to be precise—in the handling of payments from the fund set up to handle claims over the oil spill.
Louis Freeh said there may have been criminal fraud on the part of some lawyers overseeing payments. Such examples were isolated, Mr. Freeh said and, in a blow to BP, he has ruled there were no reasons why payments shouldn’t continue to be made.
BP has previously attempted to put a block on all payments pending Mr. Freeh’s conclusions. Having read them BP’s spokesman said the whole affair “underscores that neither BP nor the public has had any idea of what’s really going on” within the claims process.
BP has tried repeatedly and unsuccessfully to get the judge overseeing the case to change how the business economic loss claims are interpreted, The Wall Street Journal’s Tom Fowler says. Facing costs that are reaching far and beyond anything it had imagined, the company has tried to get the process started over, having already paid out more than $3 billion.
BP has also taken its case direct to the public, through its “do the right thing” campaign that was met with some disbelief.
The fallout from Deepwater Horizon has been difficult for BP in terms of both its reputation and finances, and will likely continue to be so for some time.
BP’s old rival, Royal Dutch Shell, has also felt the effect of environmental breaches, but the $1.1 million it will pay to settle violations of the Clean Air Act in the Arctic Ocean last year won’t break the bank. The fine merely adds to Shell’s already-enormous investment in the Arctic, from which it has seen no return.
Shell’s balance sheet may be untroubled by its fine, but its reputation is as damaged as that of BP. Shell is taking a break from the Arctic in 2014, in order to reassess its approach and, perhaps, let the dust settle.
Despite the huge outlay in the frozen north, Shell can afford to step back. BP, on the other hand, is itching to get back into the Gulf of Mexico. Its need is much greater.
Norwegians go to the polls today, with incumbent Prime Minister Jens Stoltenberg likely to be defeated by his challenger, “Iron Erna” Solberg, the Journal’s Kjetil Malkenes Hovland reports.
The result could usher in an era of change in Norway’s key energy industry. Growth in oil and gas sector investments is expected to slow to around 1% next year, from more than 15% annual growth since 2010. BG Group has warned of delays to its projects in Norway, and North Sea offshore oil worker wage growth is a pressing issue.
The oil sector’s capital expenditure has been a key source of Norway’s exceptional growth and low unemployment. In an attempt to maintain this, and reduce the burden on the nation, the new government may look to sell down some of the state’s ownership in Statoil.
Crude oil futures started the week slightly lower than Friday’s multi-month highs, but views continued to differ on whether the long-term view is bullish or bearish. You can read the Journal’s latest oil-markets report here.
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