A day after BP shares fell 9 percent in London and New York and the company hired investment bankers for undisclosed reasons, US lawmakers will ask Lamar McKay why BP made repeated choices that appeared to favor cost savings over safety before its rig blew up in the Gulf of Mexico.
BP shares steadied in early London trading on Tuesday, dropping by more than 2 percent early on before recovering to stand just 0.4 percent lower indicating a modest recovery in US trade later.
McKay, the head of BP America, will be surrounded at the congressional hearings by executives from Exxon Mobil, Chevron, ConocoPhillips and Royal Dutch Shell seeking to stave off repercussions for the industry.
McKay's rivals are likely to hang him out to dry in a rush to prove their companies would never take such risks or face such failures as the spill that has poured millions of gallons of oil into the Gulf of Mexico.
"This incident represents a dramatic departure from the industry norm in deepwater drilling," Exxon Mobil Chairman and Chief Executive Rex Tillerson said in prepared testimony obtained by Reuters.
The April 20 explosion on an offshore rig killed 11 workers and ruptured BP's well. The spill has fouled 120 miles (190 km) of US coastline, imperiled multibillion-dollar fishing and tourism industries and killed birds, sea turtles and dolphins.
In a pivotal week in the crisis, Obama wraps up a two-day trip to the Gulf on Tuesday before returning to Washington to give a televised speech aimed at seizing political momentum that has slipped away as the oil flows unabated.
Some Gulf residents are angry at the commander-in-chief.
"This is ridiculous. This is America. They're letting BP control this country? Or any other oil company? What's going on in this world?" said oyster dock manager Terry Alexis in Empire, Louisiana.
Obama said he would press BP executives to deal "justly, fairly and promptly" with damage claims when he meets them at the White House on Wednesday.
The spill has overshadowed Obama's political agenda of job creation and Wall Street reform, both key issues in November congressional elections in which his fellow Democrats are expected to face tough fights to hold on to their majorities.
Grilling in Congress
BP has lost more than 40 percent of its market value since the crisis began and faced a barrage of criticism over its handling of the cleanup. Last week, it was confronted with a White House threat to widen its liabilities for the disaster.
Two Democratic lawmakers said British-based BP chose faster and cheaper drilling options in the Gulf of Mexico that "increased the danger of a catastrophic well failure".
"It appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk," Henry Waxman and Bart Stupak, the top Democrats on the House of Representatives Energy and Commerce Committee, said in a letter ahead of Tuesday's hearing.
They quoted e-mails sent before the explosion by BP drilling engineers who called the project a "nightmare well" and said a team leader who opted not to use extra equipment to reduce the potential for gas flows into the well was "right on the risk/reward equation".
BP Chief Executive Tony Hayward is expected to face harsh questioning at a congressional hearing on Thursday. A BP spokesman declined to comment on testimony before the hearings, which many investors see as political theater.
Reuters
(China Daily 06/16/2010 page6)