[Deepwater Horizon] Rig Firm's $270m Profit from Deadly Spill

[Deepwater Horizon] Rig Firm's $270m Profit from Deadly Spill

business.timesonline.co.uk

THE owner of the oil rig that exploded in the Gulf of Mexico, killing 11 people and causing a giant slick, has made a $270m (£182m) profit from insurance payouts for the disaster.

The revelation by Transocean, the world’s biggest offshore driller, will add to the political storm over the disaster. The company was hired by BP to drill the well.

The “accounting gain” arose because the $560m insurance policy Transocean took out on its Deepwater Horizon rig was greater than the value of the rig itself. Transocean has already received a cash payment of $401m with the rest due in the next few weeks.

The windfall, revealed in a conference call with analysts, will more than cover the $200m that Transocean expects to pay to survivors and their families and for higher insurance costs.

(visit the link for the full news article)

edit: for title clarity

[edit on 9 May 10 by Gools]

Well this should fuel all those conspiracy theories floating around out there (puns intended).

So did they do it for the insurance money?
Are they delaying fixing it for the drama of it all?
Did they do it to reverse Obama's easing of offshore drilling restrictions?
Did they do it to keep oil prices up?

Tin foil hat wearers want to know!
.

business.timesonline.co.uk
(visit the link for the full news article)

I just threw up a little. They are not even ashamed about it. How anyone RESPONSIBLE for this is allowed to profit from it is beyond me.

Edited to add: They don't even know what caused it and they are already paying out? I have an insurance claim running for months now and I haven't gotten any money yet and that is about 500 Euros in damages. Crazy.

[edit on 9/5/10 by Lebowski achiever]

Simply disgusting.

First, I would like to know how you can even over-insure something? Then, how can you immediately get paid out for it before the cause of the accident is even determined? This just smells rotten no matter how you look at it.

Have all the victims even been recovered and buried yet? I would call this pure blood money....first for those that lost their lives on the boat, the animals losing their lives in the sea and all the people having their lively hoods taken from them.

Enough to cover the pay-outs to the family members and extra insurance cost? Above and beyond what they collected for the cost of the ship? I hope they are taken for it all and go bankrupt running with thier tails between their legs.

THEN spend some time in jail for the damage being done to the world.

I live in Florida and am personally upset and devastated by his spill. Your thread only stokes my ire. But since you were able to maintain a little levity, I will attempt same.

Perhaps they could plug the hole with crisp, absorbent $100 bills.

I heard that BP are only liable for a maximum of $50million for the catastrophe, and i assume you US citizens will be footing the rest ?

reply to post by ken10


No, I assume we will find a way to hunt down these people and SQUEEZE it out of them. BP included. BP had better realize the US is going to require A LOT MORE from them in terms of money and mitigation than they think.

Originally posted by ken10
I heard that BP are only liable for a maximum of $50million for the catastrophe, and i assume you US citizens will be footing the rest?

May 4 (Bloomberg) -- BP Plc Chief Executive Officer Tony Hayward said he expects economic costs of the oil leak in the Gulf of Mexico to far exceed the $75 million federal limit on damages.

Source

Alright. That is pretty messed up. Conspiracy time? Maybe some may consider looking at my Halliburton thread now. Halliburton bought up a company that probably helped clean up the oil spill. They bought this company for $240 million 8 days before the rig explosion. Halliburton was on the rig doing cementing work 20 hours before the explosion. Read all about it on my thread.

www.abovetopsecret.com...

Originally posted by Gools
So did they do it for the insurance money?

Well, they certainly didn't lose anything from it:

The total cost of the clean-up and compensation could reach $30 billion, according to some estimates. Transocean said that virtually all of that must be covered by BP and two smaller partners, Anadarko Petroleum and Mitsui of Japan.

In a stock exchange filing, Transocean said that BP was contractually obliged to take “full responsibility for and defend, release and indemnify us from any loss, expense, claim, fine, penalty or liability for pollution or contamination”. Newman added: “Our industry has a long history of contract sanctity and we expect BP to honour that.”

This is interesting... tin foil hat on... I think I'll go off and try and figure out how all these companies relate to one another...

reply to post by kinda kurious

$75 million federal limit on damages.

It must have been 50million Pounds quoted, as i'm in England.

I still don't think it will cover it though !

reply to post by ken10


Gotcha, and I agree it will be substantially more. There is a legislative bill being proposed to raise cap. Hopefully retroactive.

[edit on 9-5-2010 by kinda kurious]

Seriously what the hell is wrong with humanity lately... It seems like NOTHING matters anymore...human life, animal life, nature...breaks ma heart and PISSES me off

He will more than likely pay out most of that insurance gain in the form of lawsuits from eco types, goverment and states whose coastline are affected as many states who affected now are suffering from loss of tourism dollars.

Oh come on people, slow down a second and put your thinking caps on. The type of insurance were talking about here isn't like the kind you have on your car. This insurance payout ain't necessarily "profit". When your insuring an oil rig, commercial airliner, or rock star's fingers your insuring the value of the thing PLUS the revenue they'll lose over the life of the thing. They bought this oil rig to "rent out" to people like BP for a decade or more to come. When the rig sank they lost not only the value of the rig but the revenue the rig would have made. Just saying they got more money than the rig cost them doesn't mean they profited at all. They'll probably lose quite a bit in revenue and liabilities beyond what the insurance policy covered. If you want to prove they made money, prove no one wanted to rent the rig anymore, prove that the new driling laws made the rig less profitable in the future, don't just say it's profit cause they got more than they paid.

Paul

Good they can endorse the back of the check as "Pay to the order of the taxpayers of the United States of America and Mother Earth"

Strange this post is here, since I was just pondering this scenario this afternoon. I used to work for an oil refiner in the 90s. We had one year where there were 2 accidents that shut down the refinery for a period of time. Because of the way gasoline margins were running, the firm made more money from the business interruption insurance than they would have made on the gasoline.

Now the insurance you mention appears to just be on the physical rig. I'm sure there was business interruption insurance as well.

And every time Obama said "BP will pay for the damages" and BP said "We'll pay for the damages" I just snorted and referred to the $75million limit. Ridiculous!

A couple of pieces of info I came across to put some of this in perspective...

Again, buying insurance for commercial equipment you lease like this isn't like buying insurance on your car. You're insuring for the replacement cost as well as the lost revenue. If your a pizza delivery guy and your car dies you can just instantly get another and stay in business without losing clients. If your oil rig sinks it'll take years to replace it, and now a similar rig will probably cost more to build.

The cost of the rig was $350 million in 2001. I'm not sure what it would cost to build a replacement today, but it's not inconceivable that it would be $500+ million. Stuff like this gets more expensive to build over time. And it will take years to build. BP just renewed their contract at $544 million for three years for this rig, which is now money Transocean has lost, since it'll take that long at least to replace the rig. So, anyone suggesting Transocean did this to make a profit needs to prove their case, because its really damn unlikely. Maybe somebody else is making a profit, but it's unlikely to be Transocean. BP's long green PR campaign is sunk along with the rig, this is bad for them. Maybe Halliburton will make some money, but they'll be in court for years on this one proving it wasn't them who screwed up in the first place. If people were saying this was done by an eco- group to prevent offshore drilling, and it just "got out of hand", that's a conspiracy I might at least see as logical, but a profit would be hard to find here.

Paul