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Tuesday, August 31, 2010

BP CEO tells governors lawsuits are not the answer

BP CEO tells governors lawsuits are not the answer SEAFOOD.COM NEWS [Montgomery Advertiser] By Sebastian Kitchen - August 31, 2010 - HOOVER, Ala., The Mississippi-born top executive of BP told Gulf coast officials Sunday that the company is trying to compensate people with losses due to the oil spill without litigation, but that a lawsuit filed by the attorney general of Alabama is complicating the company evaluating a $148 million claim from that state. Incoming BP CEO Bob Dudley said the lawsuit was filed by the attorney general the same day that Gov. Bob Riley and other officials presented him with the $148 million claim for lost revenue. 'We hadn't even read the claim when the lawsuit came. It was that quick,' he said. Alabama Attorney General Troy King filed two lawsuits on Aug. 12 against BP, Transocean, Halliburton Energy Services and other companies blamed for their alleged involvement with the April oil rig explosion that killed 11 workers and led to millions of gallons of oil leaking into the Gulf of Mexico. King argues that he is trying to ensure BP is keeping its word, that there were outstanding unpaid claims despite all of the flashy TV and newspaper ads, and that he believes the company is hiring lawyers and experts to avoid taking care of its obligations. A spokesman for King has argued the lawsuit can be dropped if BP meets its obligations, that the attorney general wants to ensure there is legal protection for the people of Alabama and that $148 million could be 'chump change' compared with the final amount the state could receive. Riley has claimed the lawsuit was premature and that it could hurt Alabama receiving money from its claims. 'It does change things,' Dudley said. The lawyers have more reservations, he said. Dudley said BP officials will meet Monday with representatives of the Alabama attorney general's office and Riley's finance office. He said they will meet to discuss the specifics of the claim and the claims in the litigation. Dudley will not attend the meeting. Dudley said BP's approach has been to negotiate 'without the time-consuming process' of litigation. He said BP, unlike Exxon with the Valdez spill, does not want to spend 20 years in court. 'I do not think that is the way for us to resolve this,' Dudley said. He said that Alabama was the first to submit its claim, which Riley, economist Keivan Deravi and acting finance director Bill Newton did during an Aug. 12 meeting in Montgomery with Dudley. Dudley said how they handle the claim will in some ways set a precedent. The $148 million is the estimated loss in state revenue in the region affected by the spill from May through September and is not the final amount, according to Riley's office. Dudley was in Hoover, just outside of Birmingham, to address the Southern Governors' Association, where he was joined by retired Adm. Thad Allen, the national incident commander for the spill, and Kenneth Feinberg, the administrator for the $20 billion fund set up by BP to pay claims. Dudley said BP has paid $296 million in Alabama with $98 million for claims for individuals and businesses, $22 million to help promote tourism, a $50 million grant to the state, and funds for the Vessels of Opportunity program and for mental health. 'There will undoubtedly be more,' Dudley said. Dudley said they should have the blowout preventer that failed, contributing to the giant spill, to the surface by late Monday or early Tuesday. He said they are treating the blowout preventer as evidence in the investigation. Dudley said that the company should release a detailed report within 10 days 'of the details of what happened on that rig.' He said the report would have been ready on Monday, but those working on it wanted to look at the blowout preventer and be certain there were not any surprises. As with aviation accidents, Dudley believes people will see that there were several issues that led to the April explosion, the deaths of 11 workers and tens of millions of gallons leaking into the Gulf. He said there are failures of equipment and of very experienced people. Dudley said the well will be capped and he does not expect it to leak again. 'The well will be capped and nobody will ever want to go near it again,' he said. Dudley said BP is not trying to hide behind the $75 million legal liability cap and has spent $7.5 billion so far in claims, to help states promote tourism, to test seafood, for studies and on cleanup efforts. BP has a goal of selling $25 million to $30 million of its $250 million in assets to meet its obligations and to show the market the company will meet its responsibilities, Dudley said. He said BP will be a smaller, slimmer company. But, he said, the company is not in danger of filing Chapter 11 bankruptcy. Dudley said any talk of BP withdrawing from the coast since the leak has been stopped 'couldn't be any further from the truth.' He said resources that are no longer needed for cleaning beaches are not there, but that work continues to clean up the marshes in Louisiana. Mike Sole, outgoing secretary of the Florida Department of Environmental Protection, said during the governors' association meeting that work with the recovery from the spill would continue there for months, if not years. Allen told him the response would not stop even if the direction was changing from response to recovery with more emphasis on local control. Partially at the urging of Riley and Mississippi Gov. Haley Barbour, Dudley said BP is spending $500 million for independent research on the effects of the oil and dispersants on the Gulf. Dudley, a Hattiesburg native, remembers fishing and swimming along the Mississippi and Alabama coasts during family vacations growing up. 'It's very personal to me,' he said. Copyright © 2010 HoumaToday.com - All rights reserved. Ken Coons Seafood.com 1-781-861-1441 kencoons@seafood.com

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