The oil spill in the Gulf of Mexico has adversely impacted all the key players. BP’s stock has dropped more than $32 billion, Likewise the stocks of Transocean which owned Deepwater Horizon, and Cameron International, which made the blowout preventer that failed, are also declining.
Transocean’s shares lost almost half their value since closing above $92 on April 20th, today they are valued at under $50. Cameron has declined more than 25% from its peak.
Fitch Ratings estimated the cost of the cleanup could exceed $3 billion but insurance will likely cover most of that cost.
The Obama administration has pledged to recover “every dime” of taxpayer expense from the spill, however US law caps company liability at $75 million per spill. Transocean has already taken legal action to limit its liability to $27 million.
For the Exxon Valdez oil spill, Exxon Mobil paid out $4.3 billion in compensation, cleanup costs, fines and settlements before insurance kicked in.
A full accounting of blame appears to implicate the government agency in charge of monitoring oil rigs. The US Minerals Management Service (MMS) director, Elizabeth Birnbaum has been fired due to reports of fraternization between MMS employees and oil industry employees. The MMS regional supervisor is also alleged to have received inappropriate gifts from BP.
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Next: Obama Presidency and the Gulf Oil Spill
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