Quote:
Originally Posted by Pinner
http://money.cnn.com/2010/06/09/news...spill.fortune/
BP was so certain that there wasn't any risk that three years ago they thought the insurance industry was ripping them off, so they're self-insured on this. How stupid! It was the best thing that ever happened to the insurance industry.
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One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11.
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Something sounds really not quite accurate about that insurance thing. I wouldn't believe that one bit...... I'd get into detail but it would be long and kind of boring for everyone here as far as oil and gas contracts go, but I'm
extremely skeptical and I think he's misunderstanding the reference to being self insured as it applies to oil and gas agreements. They'll have insurance, but it will be maxed out at something like $20 to $50MM and it will be BP's insurance 100% and Anadarko's insurance 100%... separate items for their own liabilities they end up with, not BP/Anadarko joint insurance as to their working interests (which is 75/25) as per their Operating Agreement that covers this drill. That's typically what a "self-insure" mechanism is about... that you'll provide your own insurance in a joint agreement.
As for the Obama letter agreement with Hayward, who's to say what's in the agreement as to what BP will cover?? Pretty sure any lawyer could tear apart what "all costs" means as far as this disaster is concerned. Furthermore I'm pretty sure there's a max liability that BP will certainly be hit up to, but anything beyond that number and BP will see the US gov. in court.
Also everyone keeps chirping about the "end of BP", which obviously is a huge story... but this definitely is super bad news for Anadarko, one of the larger American oil and gas companies out there as well. I'm sure there will be some lawsuits between them and BP coming up too.