As BP tries to clean up its act – prices go up

We have noted that BP seems to be either unlucky or negligently careless over the last few years. While re-branding itself BP instead of British Petroleum, replacing the Viking shield with a Daisy and placing wind generators in its garages may have worked wonders for the ‘green’ image it likes to portray, it seems that in reality oil is a dirty, messy, dangerous game and no amount of marketing can deflect that when things go wrong.

Well certainly things are going badly at the moment, with cracked pipes in Alaska and staff being blasted in Texas it seems that BP is now moving into hyper cautious mode. And this is beginning to affect the price of oil again as fears grow that supply may be less than optimistically predicted a few days ago.

Here’s a report from Investment & Business News

BP’s investors feel thunderbolt

BP is under investigation and that has made it cautious. Last year, a massive fire in a BP oil refinery plant in Texas killed 15 people. This had regulatory authorities examining the company’s approach to safety. Earlier this year, the company found itself even more under the microscope after the oil leaks and subsequent closure of most of the Alaskan Prudhoe Bay field. So now the company is dotting every ‘i’ and crossing every ‘t’.

And all this caution, or is it simply good business practice, has hit the massive Thunder Horse oil platform
When it’s finally ready, the platform is due to process 250,000 barrels of oil a day and 200 million standard cubic feet of gas per day. But the platform, which stands above 6,050 feet of water, 150 miles southeast of New Orleans was damaged by hurricane Dennis last year.

Now it’s emerged that there are further delays, and the $1billion platform which is 75 percent owned by BP and 25 percent owned by Exxon Mobil Corp, won’t start production until 2008, two years later than previously predicted.
Tests over four months "revealed metallurgical failure in components of the subsea system," said a BP statement.
The repair bill is likely to run into the hundreds of millions of dollars...

For the US to rid itself of the volatility in the Oil market and distance itself from Middle East instability it needs to encourge more investment in infrastructure and storage capacity – unfortunately too many lobby groups have paralysed any attempts at improvement.

Crude oil futures prices ended higher Monday on the New York Mercantile Exchange With the near-month contract for the benchmark grade rising 47 cents, to close at $63.80 a barrel.