What is the future for BP? Since we have a President who must set up demons or straw dogs to deflect criticism, BP is getting the business from Obama. He will sue them, he will kick their ass, he has his boot on their neck, he may disallow dividend payments, and he may even file criminal charges. But, BP is still running the show because Obama can’t run anything and his main competence is finger pointing. So, let’s tear down the company that we need to solve the problem. Good idea? Not enough piling on, let’s come up with a new idea. We will make BP pay the lost wages for the offshore workers who are now out of work because Obama put in a 6 month drilling moratorium. I’m not defending BP, I believe they are responsible for the problem, need to fix the problem, and need to pay all their claims. I’m just very concerned that Obama may push BP to take drastic actions. They do have options.
Many Wall Street experts believe BP will file bankruptcy much like Johns Mansville did years ago. When the asbestos suits piled up, JM just filed bankruptcy. BP has an operating cash flow this year of $34 billion. Capital expenditures and acquisitions plus dividends would leave $4.5 billion. That would tend to favor the bankruptcy road. Obama seems to ignore this option. He is only able to come up with political solutions to the problem, not real world solutions. He is going to meet with the top brass of BP after all this time. So, if BP files bankruptcy, the court will set-aside so much for claims and you and I will pay the rest with tax dollars. Thanks, President Obama, that was a great idea. And, millions of investors who own BP stock will get Obama’s boot on their necks. And, employees of BP will lose as well. Pushing BP into bankruptcy seems like a very bad decision. But, there is an option that is worse.
BP could be purchases by PetroChina. Remember, when Cnooc tried to buy Unocal in 2005? Almost happened. If the Chinese, who have a $60 billion warchest to buy international investments were to step in and save BP from Bankruptcy, how far will Obama get with his foot on the neck of China idea? He can’t deal with BP and now the British government which is accusing Obama of overkill with BP, how will he do with China being the primary offshore driller in the US? If China were to do a cash deal for BP they would control an additional 18 billion barrels of reserves around the world. As demand for their oil steps up, oil that would normally go elsewhere might get diverted to China putting strain on the US by losing our own offshore oil.
Wouldn’t it be nice if we had a president who thought some of this through before he shot off his mouth? Or, at least hired people who could control his mouth.
