A gun to whose head?
So? What’s all this about then? One starts to get a sense of a jittery administration waking up to further home truths. Someone is afraid and trying to look all strong and manly.
Let me explain.
First, Obama powerless as everyone else in the face of the broken well a mile below the sea, starts to make decisions as to where the blame lies. He chooses to blame BP for reasons not yet entirely clear, except perhaps that he needed to look like he was doing something even if it was only shouting loudly, and the other contenders are American companies, and additionally BP has the deepest pockets. A good lawyer, Obama knows that you only sue rich people. All this does is crash the share price of BP. It drops by a half, although it’s made modest steps back recently. Well, you might say not a bad thing they should take their punishment. You take the rough with the smooth. Life’s tough and my beach is all covered with oil.
Secondly, for rather real politic reasons BP chose not to take the selective bankruptcy route, of dumping its US operation as it felt, at that time, the backlash would cost more than it could possibly save.
Only that policy rather left BP financially vulnerable to take-over, or others buying in. Others, who might not share BP’s rather pro-American stance. Others, who might have different views on the present situation.
Certainly, Exxon Mobil are American and they would like a chunk of the action, and that would be OK? Well no, that little game would never get past the trust laws of either America or Europe. So others come into play.
Sokri Ghameh the Chair of Libya’s National Oil Co, says BP’s shares are now “good value for bargain hunters”. Libya’s a good friend of the US –right?
The Kuwaiti Investment Authority and China’s PetroChina are interested. China you will remember was blocked a couple of years back from buying California’s Unocal on grounds of national security. China’s another good friend of the US – yes?
Suddenly awake to what is happening, the US Department of Justice has asked BP to give it advance notice of any planned sales or deals involving significant cash transfers. Oh how this smells of panic! (They seem to be thinking along the lines that such a move by BP would trigger an investigation by the Committee on Foreign Investment which is an executive branch agency that checks national security issues.)
A request to which, of course, BP has not agreed. Told you this would get interesting.
Now if for instance Libya or China buys in a huge wadge of money to bail out the share price do you think that they really want to be buying a whole load of open-ended litigation which is sure to drag on for decades?
BP is not an American company. They don’t need to care unless they want to. Do you think they have been vilified to the point that they may be, just may be, considering refinancing through Libya or China and bankrupting the very small element that is their US operation and walking away?
Is that what is Obama afraid of?
Which would leave the whole lot sitting in Obama’s lap.
Copyright David Macadam 2010