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New BP Seepage Spooking Investors
Once again deep value investors vie for the claim they are not only consummate relative value stock pickers (in a time when implied correlation is at all time highs, making relative value as dead a concept as the dodo), but underwater geologists too. At least that was the case until last night, when it was uncovered that (at least one more) seepage near the BP well site may be leaking oil, methane and who knows what else uncontrollably, potentially confirming the running thesis proferred by Matt Simmons that leaks are prevalent and not localized to just the Macondo well. Reuters follows up: "Investors fretted about possible seepage from BP's capped Gulf of Mexico well on Monday and speculation grew about assets the company may sell to pay multibillion dollar costs for its oil spill. A BP spokesman said the seep was detected by its
engineers but it was unclear whether the source was the blown-out well,
adding that seeps were a natural phenomenon in the Gulf." The stock has sold off appropriately, now that BP trades as a "distressed catalyst" story, with any given day seeing the shares going up or down by double digit percentage. How this stock is still pitched as a relative value play is mindboggling, when one adverse piece of news could send it materially lower.
More from Reuters:
Analysts said investors were concerned about reports of the seepage, though any updates on a more permanent relief well to kill the leaking well were more important.
"There's been a lot of punting around the stock," said Richard Griffith, oil analyst at Evolution Securities, adding that would likely be continued volatility.
"The only thing that really matters is the relief well. If the relief well doesn't work, they will have a massive problem," he said.
National Incident Commander Admiral Thad Allen said in a statement that he had sent a letter to BP stating there were a number of unanswered questions about the monitoring systems it committed to as a condition of the U.S. government extending the well integrity test.He listed detection of a seep near the well and the possible observation of methane over the well. He said he had authorized BP to continue the integrity tests for another 24 hours.
The BP spokesman said that if a seep is confirmed from the well, the cap will be lifted and oil flowed to the surface.
Of course, should the well be unblocked, the rage in the GoM coastal areas, which have recently seen a brief respite from the ongoing gusher, will be unprecedented, which explains the unwillingness of both the administration and BP to step back to a previous level in the operation:
Carol Browner, Obama's top energy adviser, said in an interview on ABC's Good Morning America program: "If anything changes we can move rapidly to open parts of the cap and release the pressure in the event that is necessary."
She added: "Nobody wants to do that. Absolutely not... Clearly we want this to end but we don't want to enter into a situation where we have uncontrolled leaks all over the Gulf floor."
Unfortunately Carol, that is precisely the impression the administration is creating.
BP's troubles continue:
BP's role in the disaster and speculation about any influence the British oil giant may have had over the release of the Lockerbie bomber from a Scottish prison last year are sure to be discussed when British Prime Minister David Cameron meets Obama in Washington this week.
BP has confirmed that it lobbied the UK government in late 2007 over a prisoner transfer agreement with Libya but said it was not involved in talks on the release of Abdel Basset al-Megrahi, convicted of the 1988 bombing of a Pan Am flight.
British foreign secretary William Hague said on Saturday that there was no evidence BP had any connection with al-Megrahi's release.
Cameron's visit comes at a time when U.S. lawmakers are considering a range of new rules that could require tougher safety regulations on offshore drilling or bar companies like BP from new offshore exploration leases.
As we pointed out, the UK has been buying hundreds of billions of US debt. Assuming this is not just a Chinese bidding offshore operation, or a Fed shadow monetization facility, the UK suddenly has a lot of leverage over the US so any discussions between Cameron and Obama should be interesting.
Yet the biggest issue is how to deal with a potential major disappointment for millions of potential voters, should it be uncovered that not only does the cap have to come off, but that the seepages are becoming problematic.
U.S. authorities probing the spill are looking into why workers missed signs of an impending explosion and have drawn up a list of more than 20 anomalies in the crew's response to them, the Wall Street Journal reported.
The current plan had been for BP to resume siphoning the oil after the completion of the pressure tests on the well, which extends 2.5 miles under the seabed, to judge if it is able to withstand the process to seal the leak.
But Doug Suttles, BP's chief operating officer, said the company now hopes to keep the damaged well shut until the relief well is completed in August and the leak is sealed off with heavy drilling mud and cement.
"We're hopeful that if the encouraging signs continue that we'll be able to continue the integrity test all the way to the point that we get the well killed," he told reporters before Allen issued his statement. "Clearly we don't want to reanimate flow into the Gulf if we don't have to."
Suttles' statement could indicate diverging viewpoints between BP and the U.S. government on plans for the well integrity test. It prompted Allen -- who will ultimately make the final call on the test -- to issue a statement that "nothing had changed" in the joint plan.
Billy Nungesser, president of Plaquemines Parish in Louisiana, said the new cap was good news after a three-month losing battle to try to clean up oil hitting fragile marshlands as more lapped ashore.
"We're very optimistic," Nungesser told the "Fox News Sunday" program. "We see light at the end of the tunnel. It's a very long tunnel but today we're making progress."
We hope Obama is not doing a teleprompted press conference in Plaquemines Parish when the brand new optimism once again turns to realism.
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sad for the people/victims of GOM who certainly are hoping and praying for relief;
Everyone here knew it was still leaking thanks to good
intelligence.
Teleprompter getting desperate in speech today to lay blame for coming economic re-recession. [No, I don't make distinctions between Repubs and Dems - but think the PTB see what's coming and don't know what to do about it.] CNBC screaming at companies to spend their cash balances on GE wind turbines.
BP US BK.
Stimulus 2.0 imminent.
BAC breaking down. JPM to follow???
I'll post this the 2nd time in case you missed it in the last BP thread.
Again,apologies for not posting this earlier on late Sat.night when i first listened to this (20min) interview before ZH covered it.
Make of it what you will.
http://www.kingworldnews.com/kingworldnews/Broadcast/Entries/2010/7/17_M...
http://seattletimes.nwsource.com/html/businesstechnology/2012392256_apusgulfoilspillrico.html?syndication=rss
This will spook em' a lot more............
Very interesting. A quote from the article.
The question I have is do the plaintiffs have any standing to sue under that statute?
What I have trouble grasping is that if the lawsuits allege federal felonies, why is it a civilian class action lawsuit, as opposed to a federal indictment? Or is that the next logical step?
This is certainly going to be interesting, but on a years-long horizon (unless Holder's team has the criminal version ready to go soon).
I wish I was reading that same article exert, but only about the banks and not the oil companies. We actually need oil - Not so sure about the banks.
Just because we are dependent on oil, does not mean we are dependent on corrupt oil companies like BP. Indeed, if it is dismantled and an example made out of it - and trust me BP deserves worse - it will only be for the better as more competent entities can take its place. Companies like BP make us only worse off - both environmentally and economically - in fact, making oil more expensive than it should be (not that I am in favor of oil dependence) - through their sheer incompetence.
cash is just so much simpler. Although, I would accept a 1954 Les Paul Goldtop
- make mine a '59 Les Paul.
Reminds me of the police, watching at an intersection, and a car runs a red light; the police stop it and they find out those inside robbed a bank.
BP’s this giant world company, involved in everything imaginable, but when it stubs its toe, the Internet gets alive, and all these things are discovered.
There’s power in words! We are living a lie and the Internet has responded. Exposure is Modern Empire’s Achilles’ heel. Heh heh.
I have my doubt that justice will be served but good luck to 'em. All I can say is that BP wouldn't want me on that jury.
Gee, its only a "seep." Great choice of words which can be seen just about everywhere. What's the definition of a seep.
CogDis - you should be all over this one. :-)
I've repeatedly pointed out that the term "spill" is a misnomer for any number of reasons. Regardless of the "for or against" arguments for the technical usage of "spill", it's part of the larger psychological ops program government and corporations use against us. The average person doesn't measure their "spills" in millions of gallons but rather in ounces. On a subconscious level, we see it as small even if on a concious intellectual level we understand the magnitude of the actual "spill" to be huge.
Same thing with the term "seep" as in "The ZH trolls get so worked up over the BP issue that they all experience "seeps" (soon to be a "spills") in their Depends." :>)
Cognitive Dissonance yes, a 'spill' such as this secret cam video from BP board room-
YouTube - BP Spills Coffee
LOL
I saw that when it first came out and I felt it perfectly encompassed the reason the term "spill" is used. Just a cup of coffee boys, what's the big deal. Hell, this morning when I pulled up to my office door and grabbed the coffee cup, I had a "spill" as well. A few napkins and all was well in my world again.
As I say below, if you are the people who are doing the spilling, very early in the first stages of developing the industry, you will make sure there's plenty of spin applied to cleaning up black sticky smelly goo. We all do it. I never admit to making big mistakes, just small errors. Only my big mistakes don;t involve millions of gallons of black (red) crude in water.
Although you may be right that this entire thing is a psy ops propaganda exercise you may want to try typing in "oil seep" into google for some background.
It's a common term used to describe when oil and gas reaches the surface. this is how they used to find oil and gas...
Of course it's a commonly used industry term. I never said it wasn't.
Since the very first time black crude oil was "spilled" on the ground by primitive drilling operations, it seems logical that anyone doing the "spilling" would try to find a more politically correct term to psychologically mitigate the severity of all that sticky smelly hard-to-clean up substance once it has been "spilled" all over the place.
Let's get all the spilling drillers to agree to use the term "spill" regardless of the amount. Or maybe "drip, leak, trickle, dribble, slop, tip out or spatter".
Well you've covered all of the nice nice words. What would be the alternate wording that accurately describes a leaking oil tanker or an out of control well?
yeah, "poopy diaper" just doesn't capture it. Not that anyone has yet
gusher, geiser, blowout,
A leaking oil tanker has a set amount, an out of control well may be unmeasurable, certainly not in the same class as a tanker.
Remain calm. All is well. It's only a "seep".
"How this stock is still pitched as a relative value play is mindboggling, when one adverse piece of news could send it materially lower."
True, TD. However, with no one in the market except HFT and the PPT, couldn't that same be said for every single issue currently trading on NYSE or Nasdaq?
My mind is boggling!!
+100000
For the record - and to put a stake in the ground so I can later say "told you so" - based upon what I have read, the relief wells WILL NOT work.
Care to wager some gold on that?
All of it.
I'll take that internet bet.
Here for all to see. :-)
Gordon, I agree.Oil and gas has already found an alternate path up and out. When they reopen the flow from the pipe, the alternate path now becomes the inflow of sea water. I expect when they reopen(if) they will find more pressure than before if i am correct.
What will be the result of seawater getting down there? I dont know and am afraid to suggest. But its unlikely to be good.
The worst part of this whole show is the realization that our government is on the sidelines and encouraging our folk to visit the gulf coast.
It says a lot about their priorities. Our peoples health and safety is NOT their first concern as it ought to be.
That is a frightening realization for many. Not new to me as i have been reading ZH along time and so glad i did.
lol - First time in history.
You want salt water to go down... That would be the ideal result. /sigh
Google is your friend, friend.
You want salt water to go down....
Is not what i said or implied. Its not about what i want. Its natural law, gravity, oil and gas out leaves a void. Mother nature doesnt like voids, aint cha heard?
First time in history is another lie.
Many wells depleted and later increased pressure again. Not uncommon.
Check oil field history. In any event, ideal result ... for who?
Here is a set of indispensable BP apps that could keep iPhone users occupied while they are having trouble with their handset reception ... :-)
it's actually a coin flip play:
BP survives, stock rockets upwards
BP does not survive: gap down overnight to $1
Straddle bitches.
I hear ya BlackBeard. Been holding some Jan 2011 Puts since June 10th based on that very strategy. Don't have the upside leg though, as any faith in BP has been eroded to the point of no return for me.
I'm pretty sure Obama doesn't even take a shit without the teleprompter.
no wonder he always looks flushed
GG, i need one of those teleprompters for the times i smoke a bowl and my mouth runs ahead of me.
So my question is....
When are the people of the people of the US, I hesitate to call them citizens given the current bought and sold corrupt party corporate system, going to realize that the government is incapable of doing anything about anything? When in the last generation has the federal government achieved anything successfully? Nothing. Absolutley nothing. It doesn't matter what party! The only thing the government can do at this point is spend money on a vastly inefficient scale and process corruption. The US government has failed, is failed. It's mouth is still moving, and the arms are still flailing, but its utility factor is done in its current shape and form.
The government isn't going to fix the leak, and BP doesn't give two shits about anybody but Mr. Bottom Line.
Justice? That's funny. It ain't coming from the government I tell you that.
Go ahead bitch about it. You know it's true. You're not going to do anything about it, so just go ahead and vent it out so you feel all better about yourself. It's ok, you're smarter than everybody else, you're on ZeroHedge, the cutting edge of doing nothing.
*Please note that I'm not referencing Tyler, Marla, Reggie, Robo, GW, CD...et al; who in fact are doing something. They're giving information and a call to action. 99% here? Well, they're just well informed sheep. I know the score, but but but.... I still trade in the markets, bank at TBTF, keep my money in electronic form, shop at Walmart, pay my tax tribute to a goverment that doesn't represent me, blah, blah, fucking blah. Knowledge is power, unless you shelve it, blog it, and do nothing. Do nothing scam colluding blowhards, that's what most here are. I love the articles, I still read, but I can't stomach venturing into the comments very often anymore. Oh and thankyou fucking trolls for running off the comment-ers I actually liked reading and learning from on this site.
Crab Cake (because you are a credible poster & not a troll),
There is not anything one can actually "do about it" anymore than a passenger on the titanic could re-float the sinking boat. Just be aware and position your family for the inevitable.
What do you propose "one does"? Vote for a different party? Try to un-do 50 years of engineered citizen apathy? ferment revolution? I suggest one makes a sober assessment of the current situation & reacts accordingly.
I'm dollar hedged, I have land, PMs, community and skills & tools to become self sufficient and barter worthy. At a few mouse clicks and all of my "digital money" is off shore. A few more mouse clicks & a short flight and we are off-shore & $500K away from a new set of citizenship papers. Take your choice.
No point in wringing one's hands and saying: "we are just beating our gums & doing nothing". I have done something and my family and I are going to continue to do extremely well.
Some of us have been learning, and preparing proactively.
I agree Crab Cake, that under normal times, these people would be gaining in power. But, because of "socialism everywhere" and Obama, it has brought the spotlight on these operatives.
You've heard of "England's finest hour." This is socialism’s last hour. It has finally come to the end of the road--to the point where the oligarchs have started trying to operate a superpower with socialism. There is nowhere to go from here. There is no free society across the ocean that is going to pick up our pieces.
This one-world governmental/corporate imperialist structure goes into a poor country or a duplicitous regime such as Papandreou’s Greece, nails down the politics and the loans—all you need is one guy from BP, one guy from government, and one guy from the Obama Administration—to seal the deal. They do the politics and the loan and the country signs on for exploitation. In a Third World country, give the leader a new Mercedes and a few rich families at the top a slice and you own the country from then on.
These people are atheists. They do not believe in God or a life hereafter. They don’t care even about their own families or future generations. They want power, to make money while they’re still alive. After that, they don’t care. I have a feeling Keynes didn’t really care about what happened after his death; it made no difference to him whether or not Britain or the US continued as beacons of freedom. (The stained-glass window in the headquarters of the socialist Fabian Society to which he belonged depicts Sidney Webb and George Bernard Shaw striking the Earth with hammers to remold it.)
And as long as they can keep “growth” expanding (a few rich people can increase GDP while the majority grow more impoverished), it can take a few years before collapse. If Keynes had lived for 200 years, those still surviving probably would have hanged him. The guy—whose policies were boosted enormously by Robert McNamara who jockeyed the World Bank into an agent for global empire on a scale heretofore unknown--has brought us to the edge and collapse.
Socialism has led us to this point, but it’s not cyclical. Socialism doesn’t just pick up where it’s left off and rebuild again. Socialism eventually arrives at the exit door; at that point where it can’t go any further.
The Obama Administration acts as if there’s nothing that matters after they’re all out of office. IOW, if they’re in for four years or eight years, after that they don’t care at all—about small businessmen, about freedom, about the nation’s children. They’ll have had their chance on top of the pyramid, and by Gad, they’re going to spend, drink and enjoy it! The things Obama is putting into place indicate he doesn’t care about tomorrow at all… or even for the people who support him.
The march to global empire has taken on terrifying dimensions, yes. But the good news, IMO, is that so has the backlash. And the Internet has the whip hand.
got 2 garbage cans full of rice and beans, expanded the garden this year and sharing with neighbors. Learned about silver and got a thousand ounces months ago at 14. Since then have given 300 to various locals as they had never seen gold or silver. I made a vow to tell all i meet each day what condition our condition is in. Many days i start out with 2 silvers in pocket and find someone to give it to. Usually strangers. On the net , utube i share info as i keep abreast of developments.
I have less then 10 dollars in the bank for over a year now. I could not possibly trade on the market since i would be doing business with criminals .
Wallmart sees me as often as mcDonalds, once in ten years.
I owe the government 15 grand according to them. My answer to that is to quit my business after 30 plus years, since i would be working more for them than myself. I sold my half the house for 10 $ to my friend who is older.
We reverse mortgaged so theres no rent/mortgage payment.Yea, we would have lost the house later had we not done this.
All i have left is the crewcab and trailer, scaffolding and other tools , all free and clear. I aim to sell it all and fix it to where i have nothing of value and return to my Hobo ways.
I am 59 and on the wrong coast. Were i on the east coast Banks and window repair men would become more familiar. There are a few things i would do to harass the PTB.
I hear you, merehuman. A friend of mine, a 39-year-old genius who’s a mechanical engineering, became so angry because of the living costs in the San Francisco Bay area and the taxes he was paying, that he quit all his consulting jobs, cold turkey. He’s since had to take on some jobs, but he is very bitter—with the “system.” And broke.
This New-York-centered global tyranny that runs on greed is not only bringing servitude and misery to the United States with the rest of the world, but it is forcing Americans to live in a prison camp in constant fear of those the globalists have plundered, those who “claim the right to defend themselves against what they view as tyranny”—the suicide bombers, the airplane hijackers, the Afghans…and all the other members of the globalists’ so-called “Evil Axis.”
These greedy oligarchs with their insatiable appetite for the world’s resources are destroying the planet and fostering slavery all over the world—bringing slavery to America’s doorstep, with her declining GDP, her 22% unemployment and lost opportunities for college grads because of outsourcing, her stripped bare homeowners and savers and small businessmen and wage earners…
Joe Stiglitz, a member of Socialist International and former Chief Economist of the World Bank, said, “Globalization …seems to displace old dictatorships of national elites with new dictatorships of international finance.”
In 2002, in Globalization and Its Discontents, he wrote: “To make its [the IMF’s] programs seem to work, to make the numbers ‘add up,’ economic forecasts have to be adjusted…GDP forecasts are not based on a sophisticaed statistical model, or even on the best estimates of those who know the economy well, but are merely the numbers that have been negotiated as part of an IMF program.”
Peoples around the globe are over the barrel: it’s all a GDP mirage
Truly excellent post.Bravo!
+100, and then some. . .
don't wait for the un-abled peoples of amrka to wake up to their fates - you mention hesitation at calling them "citizens" - I think when those who write the "rules" renamed citizens "consumers" that was the end. . . consumers are not interested in the responsibility of citizenship, they're like two-year olds, looking to be taken care of (false "trust"), and flailing about in a tantrum when that doesn't happen. . .
the majority will only be re-active to the unfolding events, as they go about their habitual behaviours, unconscious to their surroundings. . . pulling away from the herd can feel un-comfortable at first, but once you hit your groove, you can't ever go back to wearing your gov't approved blinders. . .
I hope you don't disappear, your posts are valued - I look out for you when I scan the commentary. . .
I've got some seepage myself. Shouldn't have eaten all those olestra potato chips.
The decisive moment occurred in 1951, when Iran rebelled against a British oil company that was exploiting Iranian natural resources and its people. The company was the forerunner of British Petroleum, today’s BP. … Perkins’ “Confession of an Economic Hit Man”
The Fed cannot paper over the world. Remember the airplane with Clinton’s Commerce Secretary Ron Brown aboard and an undetermined number of leading U.S. business executives working with the administration on a trade mission to Bosnia-Herzegovina to loot the resources of the world, that crashed into a mountain near Dubrovnik?
They, like BP, were using the political frames, the IMF and World Bank, to loot the resources of the world.
Throughout most of history, empires were built largely through military force or the threat of it. But, says former Economic Hit Man (EHM) for the international corporations, John Perkins, “with the end of WW II…the specter of nuclear holocaust, the military solution, became just too risky.”
The new strategy for World Empire that then began is still operative. Does this sound familiar? Writes Perkins:
“The decisive moment occurred in 1951, when Iran rebelled against a British oil company that was exploiting Iranian natural resources and its people. The company was the forerunner of British Petroleum, today’s BP. In response, the highly popular, democratically elected Iranian prime minister (and TIME magazine Man of the Year in 1951), Mohammad Mossadegh, nationalized all Iranian petroleum assets. An outraged England sought the help of her World War II ally, the United States. However, both countries feared that military retaliation would provoke the Soviet Union into taking action on behalf of Iran.
“Instead of sending in the Marines, therefore, Washington dispatched CIA agent Kermit Roosevelt (Theodore’s grandson). He performed brilliantly, winning people over through payoffs and threats. He then enlisted them to organize a series of street riots and violent demonstrations, which created the impression that Mossadegh was both unpopular and inept. In the end, Mossadegh went down, and he spent the rest of his life under house arrest. The pro-American Mohammad Reza Shah became the unchallenged dictator. Kermit Roosevelt had set the stage for a new profession…
He had orchestrated the first U.S. operation to overthrow a foreign government…”
Not only that, but you should add that the operation came in under budget at only $80,000
How's that for efficiency!
Of course the Sha and savak came afterwards and tortured/murdered Iranians, but hell, is that any reason for them to still be pissed off at us.
I ask you.
The reason for pursuing under RICO is that racketeering charges are easier to prove. Sort of like going after Al Capone for income tax evasion.
From what I have read paper work must be filed showing all "seeps" before drilling even starts and they would not be able to drill there if this existed before the blowout . Natural my ass .