We’ve heard politicians, even conservative Republicans, suggest BP would be held completely responsible for the devastation caused by the oil spill plaguing the
That in fact might be the case for BP as the magnitude of the spill increases day by day according to energy investment banker Matt Simmons, the chairman emeritus of Simmons & Co. International. Simmons, in an appearance on CNBC’s June 8 “Fast Money” said in the long-term this would force the country to reevaluate how oil drilling and exploration would be done in the
“It's almost a certainty that we're going to step back and say we didn't have the toolkit to safely go to these water depths, let alone go to these ultra-deep highly pressurized formations,” Simmons said. “I think once the moratorium ends, we have to build a new generation of equipment. So this, these rigs will all migrate to the international markets, to
But when Simmons was asked how to play this in market terms, he declared that BP would cease to exist as a company.
“I think BP's not going to last as a company more than a matter of months,” Simmons said.
The reason – BP is in way over its head when it comes to cleaning up the mess. He explained it wasn’t feasible the oil giant could possibly clean up something of this magnitude.
“President Obama got in writing out of Tony Hayward that he would clean up the
Simmons told “Fast Money” viewers he would be “surprised” if BP were still a publicly traded company by the end of the summer. He explained the mess exceeds their capability to clean it up.
“Well, first of all, they promised in writing that they're going to do this,” Simmons said. “They can't clean up the
“That's been taken away,” he said. “That was actually done after the spill in
And Simmons said BP was to blame for not being up front about the spill. According to the energy investment banker, holding the drilling equipment provider responsible won’t be possible once all the facts are laid out.
“Well, first of all, what BP's management tried to do is basically create a fraud that it was only the drilling riser where the oil was,” Simmons said. “These research vessels that finally discovered this were being highly discouraged by BP management from coming in and getting anywhere near it. They said it's just a distraction.”
Simmons explained the only oil left in the
“That's the only stuff left in the Gulf,” Simmons said. “And then it's not the 5,000 feet. It's that they went down through 18,000 feet of rock, which is why the pressures were so high when they finally hit oil.”