BP escrow account

Date 07-08-2010 23:47 Edited 07-08-2010 23:59

I did not come up with this but it will make you hot enough to get married:

It seems like a miracle that our anointed leader was able to convince BP to establish a $20 billion slush (oops, escrow) fund to compensate those hurt by the ongoing oil plume in the Gulf of Mexico . After all, he had no constitutional power to force them to do so; so had to resort to Chicago-style arm twisting.

But, let us take a closer look at the effect on BP's finances:

1. BP will establish a $20 billion fund, but will pay only $7 billion into it during 2010.

2. BP is a British corporation, but has a very large operating entity in the US .

3. By Generally Accepted Accounting Principles (GAP), BP must book the entire $20 billion expense in the year accrued. Therefore, they will book a $20 billion expense in 2010, reducing their US tax liability by $7 billion.

4. Our anointed leader also convinced this massive corporation to show their concern for the "small people" by withholding dividends to their shareholders for the last 3 quarters of 2010. This reduces their outward cash flow by about $7.5 billion, including approximately 40% of that amount to US citizens. Assuming that the Bush tax cuts will survive through 2010, the US Treasury will lose another $450 million in taxes on that amount. We won't even discuss the effect on the US economy.

Let us put the results into a table easily understood by the small people:

BP Cash Flow:
· Escrow funding ($7 billion)
· Dividend saving $7.5 billion
· Tax savings $7 billion
· Net favorable cash flow : $7.5 billion
US Treasury Tax Receipts:
· BP Corporate income tax ($7.5 billion)
· BP Shareholders' income tax ($0.45 billion)
· Net unfavorable tax receipts ($7.95 billion)

Wow, what a boon to the American taxpayers.
I guess we really should expect this. After all, our anointed leader is the most inexperienced man in any room he enters.
(With the possible exception of a meeting of the Amalgamated Chicago Community Organizers and Acorn Association)
Henry (Rip) McIntosh

By SMTatham (**)

Date 07-09-2010 00:28

HOLY MOTHER of GOD...............................if those numbers are accurate...............BP's campaign contributions to Barry Sotero were MONEY WELL SPENT!! NOPE, not hot enough to get married (that would take a LOT right now!) but plenty P.O.

By swnorris (****)

Date 07-09-2010 10:14

Speaking of marriage, BP should just put a wedding ring on the oil leak and then it will stop putting out.

By SMTatham (**)

Date 07-09-2010 11:20

If I had a nickel for every time I've heard that in the last couples months.......I could pay my bartab for the NEXT month!!! LOL

By Joseph P. Kane (****)

Date 07-09-2010 14:53

dbigkahuna

I recently heard that the relief well being drilled supposedly to intercept the blown out bore and stop the leak, is in fact another production bore into the resource deposit, and not just a means to intercept and close off the leak! This way, BP will still be able to tap the resource deposit, in the event they are no longer allowed to drill there anymore.

Are there any experts out there that could expound or comment on this?

Joe Kane

By Mikeqc1 (****)

Date 07-09-2010 15:05

is it true 1/3 of the gulf now has excessive pollution?
been hearing alot about that number.
mdk

By rlitman (***)

Date 07-09-2010 15:31

They are planning on intercepting the original well casing, and not going straight into the deposit, but yes, that's how a relief well works. Its got to remove gas to reduce the pressure on the blown well.

Oh, and another odd fact about this is that BP ows MMS royalties for any oil removed from the ground. Doesn't matter what they do with it (load onto tankers and sell it, or dump into the ocean to collect on beaches and fuzzy marine animals).

By SMTatham (**)

Date 07-09-2010 16:30

Any idea how they are gonna settle on a number for bbls removed to date?? LOL

By dbigkahunna (****)

Date 07-09-2010 17:44

The lost oil is an insignificant number. Even at 100,00 a day with MMS getting 1-4 that is $150K a day. If it goes 100 days that is $15M. A lot of money to me and you but that barely moves the decimal point on $20B

By dbigkahunna (****)

Date 07-09-2010 17:10

The way I understand bottom kill is once it is done the well is abandoned. They will have to intercept the well bore then pump the kill media down the string. The kill seals off the leaking bore and also the relief bore. They cant plug just the well bore above the intersection it has to be the W9Y.
But I am more of a La Quinta man than a Holiday Inn Express.

By SMTatham (**)

Date 07-09-2010 17:53

I had heard briefly on the news (once) that two relief wells were being drilled. The blanket of silence thrown over this is just sickening. This is the first time we as a people have seen a complete corporate takeover of media access in an emergency like this. It's damn hard to get good info. about all that's happening.

By dbigkahunna (****)

Date 07-10-2010 02:15

I think the idea of two relief bores was redundancy. If there was problems with one rig the other one could keep on. Until there is an intersection, all that can be done is daily footage. And from the drilling companies view, hitting a 20 inch hole from 5,000 feet in 18,000 feet of dirt may take some technology your do not want your competitors knowing about.

By DaveBoyer (*****)

Date 07-10-2010 04:15

I don't know anything about oil drilling, but I THOUGHT the 2 wells was so that the lower one could extract oil to reduce the pressure so that the upper one could be used to pump the plugging stuff into the original hole.

It may sound stupid to some of You, but BP has to remain a viable business in order to pay all the ongoing costs to deal with this mess for as long as it takes to clean it up.

By RonG

Date 07-10-2010 19:13

Well if thay can hit a 7"OD pipe that far underground from that distance my hat is off to them.

BP as a whole is not where the problems lay. It is the mind set from the top down that you get rewarded for getting things done and saveing $ in the process. On the other hand if you fail, you get left behind. Does any one think BP is the only ones that do it that way?

Big difference is when you are at the top level and have a golden parachute that would cost more than the clean up.

BP is pretending to play nice for the moment but when the problem has been fixed and there is nothing but law suites to contend with things most likely will take on a different shade of *&%# you.

By ssbn727 (*****)

Date 07-12-2010 06:05

Amen to that Ron!!! :) :) :)

Now, getting back to these so called relief bores being drilled... a similar type of situation occurred off the coast of Australia where another blowout happened a few years ago, and it took them at least five tries and maybe even more to plug the blowout. but then again technology may or may not have improved with respect to drilling more accurate bore paths from both directions to hopefully plug this, or maybe to extract the resource through these bores instead... Who really knows for sure except a select few at the top @ BP! ;)

Also, getting back to the 20 billion USD's... Now if you look at it from the perspective that the total 20 billion will not be disbursed all at once, then things may or may not make better sense...

Remember that 20 billion is the initial figure given and not the final amount to be allocated by BP in order to cover all of it's liability for this mess... So, let's look at it this way...
initially, 20 billion is put into an "escrow" account collecting and compounding daily interest at an astronomical rate just by it's own sheer size, and the amount of interest it earns becomes the daily amount allocated on a weekly basis, and guess who ends up still making a profit out of this whole arrangement??? You said it!!! BP!

Then whatever profit they make out of this arrangement gets put into another more secretive and yes this time we can most definitely call it a slush fund account to make even more money based on the daily compounded interest it makes and whoooppeee!!!! Everybody in the arrangement is happy as a pig in - well you know what!!! :) :) :)

Plus, it can also become the mechanism to generate any extra money that may or may not be needed just in case the total claims process exceeds the initial 20 billion when all is said and done... And we probably will not find out for another 30 years or so what all or at least most of the details that were involved with respect to how much money or anything else the governments so called negotiated in this more than likely very complex secret deal they made with BP in order to make both parties look a bit more responsible in solving this problem by throwing out such an arbitrary amount such as 20 billion USD's for cryin out loud!!! I mean, how did they come up with such a figure when the leak is still ongoing??? Smells like whole Gulf full of of dead fish in this friggin secret deal!!!

But what you'll never see is that all of that 20 billion being passed out as processed claims in one year to ensure that those folks in the Gulf who are really the ones whom are suffering from this debacle get the needed relief they deserve because after all, according to BP's own "Top Very Large person" reiterated more than once after the White House meeting"The small people need to be made whole." Or something to that effect... Yeah right!!! And I've got a bridge in Brooklyn to sell you for a wooden Nickle!!! :(

The only ones who will never be compensated properly will be the small business owners who will all be suffering for quite some time because of this mess, and have to put up with being spoon fed pennies on every dollar that BP earns by tying down as much of that 20 billion as it can in order to maximize as much profit from it as it can by using the very scheme that I just described, yet is more than likely being kept as BP's and the government's own very dirty little secret! :( :( :(

These "MF'ers" make the so-called "Robber Barons" of yester-years look like saints for cryin out loud!!! END OF RANT!!! ;)

Respectfully,
Henry

By RonG

Date 07-12-2010 12:47

Hello Henry, hope your feel well. You are so very right. 20 Billion.... IF they could indeed stick that amount in a bank just for 1/4 year (3 little months), the interest would be a nice tidy sum indeed.

I did some contract work years ago for a "Capital company" owned by a few bank execs and Attys. They would put projects together, mostly a Business park or high rise Office building with no intention of completing them. They then put together groups of investors with a prospective that all moneys go into an escrow account for a given period and if the project failed to go through, they would be refunded in full.

Investors got their tax write offs and the capital co got the interest. Pretty smooth operation. My wife is the one who caught to it. All the work I did was for show and tell to impress investors. They ran it for a couple years then took their profits and went the separate ways.

Capitalism at it’s best uh! Not I or any one I could tell ever got hurt by it. In fact I did pretty good by it. Like some one once said “It’s not always how you B*&^ but Who you B*&^ or a combination of the two”.