McAuley’s World Comments Bolded Blue
WASHINGTON—BP PLC, despite being put under pressure by the U.S. government to pay for the oil-spill aftermath, has succeeded in pushing back on two White House proposals it considered unreasonable, even as it made big concessions, said officials familiar with the matter.
BP last week agreed to hand over $20 billion—to cover spill victims such as fishermen and hotel workers who lost wages, and to pay for the cleanup costs.
The fund is a big financial hit to BP. But behind the scenes, according to people on both sides of the negotiations, the company achieved victories that appear to have softened the blow.
BP successfully argued it shouldn’t be liable for most of the broader economic distress caused by the president’s six-month moratorium on deep-water drilling in the Gulf of Mexico. And it fended off demands to pay for restoration of the Gulf coast beyond its prespill conditions.
After the high-profile meeting of administration and BP officials on Wednesday, it was in the interest of neither to discuss such details. BP wanted to look contrite and to make a grand gesture, and the White House wanted to look tough. [The latest “ACT” in the political theatre – the actors play their parts and recited their “lines” – The first “Acts” of the current “Political Theatre” took place last week during the Congressional Hearings. See: https://mcauleysworld.wordpress.com/2010/06/19/day-61-in-the-gulf-complaint-media-drones-on-about-bp-ceo-who-is-in-charge/ ]
[BP will not pay for all of the costs associated with Obama’s moratorium, costs estimated at $300 billion dollars by the Oil industry. $300 billion dollars. BP is working to make a $5 billion dollar down payment on a $20 billion dollar claim fund while Obama is making “executive decisions” that will cost America $300 billion dollars. During the negotiations BP agreed to contribute $100 million dollars towards the costs associated with the moratorium. Industry experts have stated that the cost to rig workers in “lost wages” alone will total $330 million doallrs a month for the duration of the moratorium. currently scheduled to last 6 months. Total costs for a 6 month moratorium are estimated at $300 billion dollars].
The Wall Street Journal is Reporting:
“Ms. Gorelick (BP ‘s Attorney) told White House negotiators their legal position mandating BP’s assistance to displaced workers was weak. White House officials conceded such workers may not be able to qualify for direct assistance under the $20 billion fund, a White House official in the room said.
A BP negotiator said the White House position was “half-hearted” and its negotiators quickly gave up. “You won’t find many lawyers who will say when the government imposes a moratorium, it’s the company’s obligation to help the workers impacted,” the BP adviser said.
The BP side was so confident that Ms. Gorelick suggested the two sides allow idled workers submit claims to Mr. Feinberg and let a court to decide whether the company was liable.
BP’s negotiators agreed to voluntarily add $100 million as “a goodwill gesture,” one adviser said. The two sides didn’t agree how that money would be distributed.
BP used the word “fund” to describe the separate pot of money. The White House called it a foundation. As of Friday afternoon, they still had a long way to go to structure the fund, said a member of the team working on final details.