BP Executive On The Company's Financial State
MELISSA BLOCK, host:
This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.
ROBERT SIEGEL, host:
And I'm Robert Siegel.
Lawyers from the Obama administration were in court today in New Orleans trying to reinstate a six-month ban on deepwater oil drilling. A U.S. district judge issued an injunction against the ban in June. Drilling rig and oil companies say they'll face serious economic hardship if the moratorium continues.
BLOCK: Meanwhile, BP, the company responsible for the oil spill, is wrestling with its financial stability. Yesterday on the program, I talked with BP's chief operating officer Doug Suttles about how much oil is spilling into the Gulf of Mexico and whether the response has been sufficient. Today, we'll hear from Mr. Suttles about the company's financial responsibility.
I want to ask you about who pays for all of this. BP is demanding that your partners in the well, Anadarko Petroleum and Mitsui of Japan, pay about 40 percent of what the company spent on the spill in May. Anadarko, though, has said BP engaged in gross negligence and willful misconduct. I'm wondering if BP has, in fact, received payment from either of those partners and what expectation you would have that they will help shoulder these costs.
Mr. DOUG SUTTLES (Chief Operating Officer, BP): Well, we have every expectation they'll pay their share. That's what the rules say. That's what the agreements say and we'll expect them to abide by that. But what I can tell you is today we are paying the bills. The government isn't having to pay those. We're doing that. We'll sort that out with the other interest owners here, once this thing is complete.
We haven't actually sent them the bills for their portion of this response. They're not yet due yet for them to pay us, but we expect them to do that and we expect them to live up to their responsibilities just like we're living up to ours.
BLOCK: And what have you heard from Anadarko and Mitsui about that?
Mr. SUTTLES: Well, as I said, the agreements we have in place give them a certain amount of time to respond. Now, those times haven't come up yet so I think we just need to see what actions they take.
BLOCK: And if they don't come through, what happens then?
Mr. SUTTLES: Well, I can tell you what we'll do is we'll sort that out amongst the group of us. But as I said, we expect them to honor their responsibilities.
BLOCK: There are, of course, a lot of questions about the financial health of BP. The stock price now about half of what it was before the explosion. What's your assessment of how financially sound the company is?
Mr. SUTTLES: Well, when this event happened, we had a very strong balance sheet. We have very, very strong cash flows. We can meet our responsibilities here. We are a strong and viable enterprise and we have every intention to remain to be so. So we can afford this. We are taking the actions necessary to make sure we can meet our obligations here. But I have a lot of confidence in the company's financial strength.
BLOCK: You I'm sure heard about the report in The Times of London, reporting that Britain is drafting contingency plans in case BP collapses. What's your reaction to that story?
Mr. SUTTLES: Well, you can imagine with the share price changing and many of the comments out there that people are worried and I'm not surprised that some people are looking at what their options are. But I'm confident we'll come through it.
BLOCK: Come through it in what form? In how diminished a form, do you think?
Mr. SUTTLES: Well, I think it's way too early to speculate on that. I think what you see us doing, for instance, the suspension of the dividend is just making sure we maintain the cash flow that's necessary to meet our obligations and keep the company sound. Our board of directors is focused on this. And it's probably not appropriate to comment on the details.
BLOCK: When you think about the folks who should rightfully be compensated by BP for claims from the oil spill, what would be a legitimate claim? How far up do you think that goes, beyond the immediate folks affected on the Gulf?
Mr. SUTTLES: Well, I think ultimately this is, Ken Feinberg's going to run this facility for us. He brings tremendous expertise and wisdom to that. And I think ultimately through him running the claims facility, he'll make those determinations. In the meantime, what we've been trying to do is get these interim payments in people's hands so that they can do things like pay the light bill, like go to the grocery store and try to offset as much as we can the immediate impacts. The long-term shape of what's a compensable claim is something Ken will decide.
BLOCK: Well, Doug Suttles, thanks for talking with me.
Mr. SUTTLES: All right, thanks, Melissa.
BLOCK: Doug Suttles is the chief operating officer for BP. He spoke with me from New Orleans.
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