BP Exiles CEO to Siberia, Screws US Treasury, Loses Billions

The most unpopular corporation in the world at the moment, BP, wants to hide its inability to stop the Gulf Oil Leak behind a phalanx of incredible news. Not only are events turning into a soap opera, they are creating one that is actually worse than "Coronation Street." CEO Tony Heyward is getting sacked, handed a pile of money and being sent to Siberia -- literally. BP is going to claim a tax break it "earned" by paying to clean up the mess it caused. And it set a record by losing $17.2 billion in the second quarter.

First of all, Tony Heyward is losing his job as CEO of BP effective October 1, and he's on gardening leave until then probably. He will get a $1.6 million severance package and a pension that will pay about £600,000 a year. He also becomes a non-executive director of BP's Russian joint venture called TNK-BP, which actually has several working sites in Siberia. Given that his predecessor at TNK-BP had to flee Russia on pain of death (or something worse), this isn't really a great deal.

Second, the Wall Street Journal's Market Watch is reporting that BP "will reduce its contributions to US tax coffers by $9.9 billion, due in large part to the Gulf of Mexico oil spill. BP indicated in its report that it is taking a $32.2 billion charge against earnings for the Gulf response efforts, which allows them to take the tax credit." Not even Goldman Sachs takes that credit and it just coughed up more than half a billion. So, when BP says it is going to pay to make everyone whole, it's going to do some of it with Treasury (American taxpayer) money.

Third, BP reported its financial results for the second quarter of 2010 today. According to its Form 6-K filed with the SEC, it lost $17.048 billion, or 91.29 cents per fully diluted share. Its revenues were $73.725 billion, up from $54.777 billion in the second quarter of 2009, and up from first quarter 2010's $73.071 billion. A footnote confirms the Market Watch claim, "Second quarter and first half 2010 include a charge of $32,192 million [some Brits still use thousands of millions rather than billions] in production and manufacturing expenses, and a credit of $10,003 million in taxation in relation to the Gulf of Mexico oil spill."

That's the news in the main media. If one looks over at the Oil and Gas Journal, one discovers that next Monday could mark the start of the latest attempt to close the leak, the so-called "static kill." And the "relief well crews could start trying to kill Macondo from the bottom of the well around Aug. 7. The relief well first will be drilled into the annulus of Macondo where it will set cement. Then, crews plan to drill the relief well into the casing of Macondo." Another week or so to end the leak, but "Coronation Street" tops it.

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