Friday, May 21, 2010
A $Million dollars a day
On top of all the other expenses entailed by The Hayward Blowout, BP has a clause in the lease for that well that allows payment for lost or wasted oil.
BP Plc, already facing billions of dollars in clean-up costs and liability claims, may owe the U.S. government as much as $1.1 million a day in royalties on the oil gushing from its leaking well in the Gulf of Mexico.The key is negligence. The way the government has been treating BP, letting bygones be bygones seems a real possibility.
The drilling lease with the Minerals Management Service for the Macondo well that blew up last month calls for BP to pay a royalty fee of 18.75 percent on the value of oil or natural gas “lost or wasted” if a leak is due to the company’s negligence.
BP may face $8.5 billion in clean-up costs and payments to affected businesses as a result of the spill, Neil McMahon, a London-based analyst for Sanford Bernstein & Co., said in an April 30 report. The leak began after an April 20 explosion aboard the Deepwater Horizon drilling rig, which BP leased from Transocean Ltd. Royalties on the oil spilled, as well as any that’s recovered, would add to the list of costs.
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