BP stanches the gushing of oil into the Gulf of Mexico, begins pressure testing

85 days into one of the worst environmental disasters in United States history, BP has stanched the flow of oil from their underground gusher in the Gulf of Mexico.  Now begins a 48-hour period of testing the pressure along various points of the well and anxiously hoping that the current temporary sealing cap does not cause worse, harder-to-control leaks in the well.

Additional coverage on the aftermath of the disaster to come after testing is finished; for more in-depth coverage about the pressure testing, see Business Week's coverage.

An epic Obama conspiracy theory

When "Obama" was born, Kenya was a British colony.  BP is British petroleum.  Obama is destroying the Gulf of Mexico.  QED.  At least that's how I imagine the conversation would have gone with this Santa Claus looking fellow in Lafayette Park.  My favorite part is that he puts Obama's name in scare quotes on his sign.

(via Andrew Sullivan and, originally, The New Republic)

25% of BP's market cap disappears in 4 days of trading

On June 4th, when we broke the story of the incredible rate at which BP's liability is increasing, the market valued BP at $122.6 billion USD.  Today, less than a week later on June 9th, their market cap has plummeted about 25% to $93.68 billion USD.  Today's announcement from U.S. DOI Secretary Ken Salazar that the government is about to revisit its estimates of the BP's gusher's flow rate, appears to have triggered today's one-day market decline of 15%.

The rest is probably due to a combination of factors including their promising but less than perfect attempts to cut and cap the well in addition to reports over the past few days that BP may need to begin pursuing a strategy of sequestering its massive Deepwater Horizon liabilities and shopping itself around for acquisition.

In general, you don't want a graph of your stock price over a week to look like this:

Perhaps that's why we're starting to see articles from the wags on Wall Street with titles like "BP May Not Make It" and "BP is Toast!"

BP's potential insolvency getting picked up by mainstream media

This morning the New York Times picked up on a story we broke in our original reporting last week, namely that BP is at risk of becoming insolvent due to their ever increasing liability as a result of the Deepwater Horizon oil disaster.

Though it doesn't go into the level of detail we did, the article is worth a read, as it takes a more acquisition oriented perspective as well as talks about the precedent of the once seemingly invincible Texaco filing for Chapter 11 bankruptcy in 1987 as a result of a billion dollar jury verdict.  As we reported last week, BP's Clean Water Act liability is going up at a rate of at least 1% of their current market cap every 2 weeks.

Keith Olbermann also broached the topic last night. Clip after the jump.

The death of British Petroleum? BP's Clean Water Act liability goes up by at least 1% of their current market cap every 2 weeks. Maybe that's why they're trying to move $10 billion dollars off their books before the amount of the fine can be certified.

Fun fact of the day: if you believe the latest, relatively conservative government flow rate estimates of the BP oil leak (19,000 barrels/day), BP is accruing fines at a rate of $81.7 million dollars per day, just for their statutory Clean Water Act liability ($4300/barrel, up from $3,000/barrel in the case of gross negligence under Title 33 USC § 1321).  BP's market cap at the moment is $122.6 billion dollars.

The CEO of BP "would like [his] life back."

The CEO of BP would like his life back.  Poor chap!  I bet the tens of thousands of workers and families whose livelihoods the BP oil disaster claimed would like theirs back too!  Maybe they can work something out ...



Update: He apologized.

BP and the Coast Guard now walking back early reports indicating that "Top Kill" may have been successful in capping the BP oil gusher

Reports started trickling in last night that the gusher is now gushing mud rather than oil, which would be an early indication that the Top Kill is working and that the leak has been plugged.  This morning, the L.A. Times reported that U.S. Coast Guard Admiral Thad Allen is claiming that the operation was a success.  Meanwhile, BP is more cautious, denying that the oil leak has been plugged, but saying that the operation is going "according to plan."

Update: 11:07AM EST, Adm. Allen claims to have been "misunderstood" by reporters and is now on message with BP that the operation is simply going according to plan and still in progress.

We'll be updating here as details are confirmed. We've embedded a live stream of the gusher after the break.

Tar balls found off Key West suspected to be from BP Oil Disaster

According to the Coast Guard, twenty tar balls have been found off Key West, FL but the Coast Guard "stopped short" of confirming that they originated in the Gulf of Mexico.

If these tar balls, found during a Key West shoreline survey, are indeed from the BP oil disaster, it indicates that the oil has begun entering the Loop Current, a strong current that circulates water from the Gulf of Mexico through the Florida Straits.

Independent analysts discover that the BP oil disaster is 10 times worse than BP says

NPR reported Friday that independent analysis has shown the BP "eventual worst-case" estimates to not even cover the current rate of flow from the oil leak they caused in the Gulf of Mexico, which has now been discovered to be about 70,000 barrels per day.  BP's current estimate of the leak is an order of magnitude off and they are in fact causing the equivalent of the Exxon-Valdez Oil Spill every four days. According to the New York Times, oil plumes "as large as 10 miles long, 3 miles wide and 300 feet thick" have begun to form in the Gulf of Mexico.

Below the fold you can see aerial video of this terrible spill with poignant commentary.