A summary of notable events for Wednesday, June 16, Day 58 of the Gulf of Mexico oil spill.
MONEY TALKS
After a several-hour meeting with top BP executives, President Barack Obama announces that BP will set aside $20 billion to pay claims stemming from the spill and will create a $100 million fund to pay oil industry workers left jobless. "What this is about is accountability. At the end of the day that’s what every American wants and expects,” Obama says.
MONEY WALKS
Shortly after Obama spoke, BP Chairman Carl-Henric Svanberg announces the company is halting its dividends to shareholders this year. The quarterly dividend payment due next week is canceled.
MORE CONTAINMENT
BP starts up a second system to siphon oil from its gushing leak. The new containment cap system is intended to increase overall collection capacity to 28,000 barrels a day from around 15,000 a day now. The company is drilling relief wells that it hopes will definitively halt the spill in August.
DOING THE MATH
A $40 billion-plus hit for BP? That’s what an analyst at Houston energy investment bank Tudor, Pickering, Holt & Co. writes in a recent analysis. He reached that number by starting with $20 billion for the damage claims fund and adding another $20 billion in fines for violating the Clean Water Act. The fines are based on using a 50,000-barrel-per-day estimate, subtracting for the amount of oil captured by the various devices over the past month and then assuming the flow goes through the end of August, the Houston Chronicle reports. "At $4,300 per barrel, that puts the fine at $20B, with each month adding $3B," Tudor Pickering writes. "Ultimately, BP's fine is going to be a negotiated amount — but no question it is going to be big."
DRILL, BABY, DRILL
Gulf Coast lawmakers step up their efforts to lift the administration’s six-month. Sen. Mary Landrieu, D-La., saying the moratorium could cause "even more economic damage than the spill itself" to her state.
QUOTES OF THE DAY
“(Obama) cares about the small people. And we care about the small people. I hear comments sometimes that large oil companies are greedy companies or don't care. But that is not the case in BP. We care about the small people.”
— BP Chairman Carl-Henric Svanberg
"I expect him to be sliced and diced."
— Rep. Bart Stupak, chairman of the House Energy and Commerce subcommittee on oversight and investigations, on BP CEO Tony Hayward's scheduled appearance Thursday at a congressional hearing.