It's perhaps time again to look at BP's (BP) current position in its battle to survive the aftermath of the Gulf of Mexico oil spill two years ago.
According to recent news, the effects that BP's accident is having on wildlife is even more widespread than initially anticipated. It appears that birds that migrate to the Gulf are also showing signs of having been affected by the spill. Pollutants have shown up in birds that live in Minnesota, and that are in the habit of migrating to the Gulf. The eggs of pelicans that fit this description were analyzed and the findings were very interesting indeed. The eggs basically contained petroleum compounds, as well as the chemical that was used to clean up the oil.
This could have an enormous impact on the development of the pelican chicks, and therefore represent yet another issue that BP will have to deal with in order to get over this huge disaster. Scientists are most worried about the potential chance that the chemicals will cause cancer and birth defects in the young chicks. That being said, there is at this point no real knowledge about what effects petroleum can have. Let's hope for BP's sake that the effects are small at best.
The ex-BP employee, Kurt Mix, who was accused of deleting text messages concerning how much oil was leaked during the Gulf of Mexico spill, recently made claims that evidence that has not yet been released to the authorities will clear his name. Whatever this mystery evidence is, we're not allowed to know about it as it falls under attorney-client confidentiality. If Mix is cleared, we have to ask ourselves exactly why, and what implications it will have for BP. The chances are high that the evidence is something that will indicate BP as a whole is responsible for withholding information about the severity of the leak, and the company will lose its fall guy.
Not all the news is bad. There is a chance that BP will soon be able to restart its Cherry Point, Washington, refinery that has been shut down since February due to a fire. The restart process was begun earlier this month, but the operations once again had to be halted. However, the company expects to have the refinery up and running by the end of the month. Hopefully this is true.
The closure of the refinery, as well as three others in California, has supposedly knocked gas prices up substantially in Washington, and people are starting to complain. And you can't really blame them. Prices in the rest of the country are falling while they have to deal with these increases. It does not look good for BP stock. However, the company itself claims that the shutdown has nothing to do with the rise in prices. It went further to say that the refinery would have been closed for this period for maintenance in any case and that no one should have been expecting it to start soon. Further, it stated that when it is restarted it will be done safely and efficiently. Whatever the case, I feel that it would be best for BP if it could simply get the refinery up and running by the specified date.
Valero Energy (VLO) recently reported that its 125,000-barrel-per-day Meraux, Louisiana, refinery shut for maintenance will restart by the beginning of June. Its 180,000-barrel-per-day Memphis, Tennessee, refinery, which experienced a brief power outage, is back in operation with no reported effects on production. However the company appears to be having bad luck with its refineries. In another incident a flash fire was reported at its 142,000 barrel-per-day Corpus Christi, Texas, refinery, although there were supposedly no effects on production in that case either. And, last but not least, flaring occurred at its oil refinery in Port Arthur, Texas. It is still unclear whether this will affect production at the refinery.
Chevron (CVX) will probably not need to shut down the Frade field in Brazil that it owns along with Petrobras. The area was the focus of an oil spill last year, but it seems that the companies do not plan to shut the plant down altogether. Instead, they will wait for results on the cause of the spill before making a final decision in that regard. Right now, Chevron seems confident that it will be keeping the plant in operation. Once the causes of the spill are resolved once and for all, the production at the plant may well continue.
Another oil company that is still suffering from the effects caused by an oil spill that happened last year is Exxon Mobil (XOM). Officials in the Montana area are investigating the suspicion that there is still a substantial amount of oil left behind from the spill that could be causing ongoing damage, and, despite that one of the sites has been cleared and labeled oil-free, there is still a lot of evidence in the area that the oil continues to be a problem. Exxon may need to do something proactive to counteract this bad press.
BP competitor ConocoPhillips (COP) is planning to expand its operations in Australia. In my opinion, this is an effort on the part of the company to make the most of the fact that Japan needs more and more energy supplies following the earthquake and tsunami last year that crippled the Fukushima nuclear power plant. This announcement follows a partnership that the company made last year with Perth-based New Standard Energy (NSE). The two companies are exploring the Canning Basin in Western Australia, as well as the Cooper Basin in central Australia, as both have a lot of potential.
The BP saga continues, even this long after the initial Gulf spill. At least the company is making moves to recover from other problems it has had in the past. Of course, it will need to do quite a bit more to get back to on track, especially as its competitors continue to thrive and expand.