BP CEO Tony Hayward
BP CEO Tony Hayward delivers his opening statement about the BP oil spill in the Gulf of Mexico at the House Energy and Commerce Committee on Capitol Hill in Washington, June 17, 2010. REUTERS

Britain's largest company, BP, is the world's third largest oil major, a global energy firm the main products of which are oil, natural gas and alternative fuels. Its 2009 revenues of just over $246 billion exceed the GDP of Finland and it employs over 80,000 people. The company's headquarters is in London, its American base is in Houston, Texas and it is listed on both the London and New York Stock Exchanges with British and American shareholders each accounting for some 40 percent of the company's shares.

The men at the head of this giant company with assets exceeding $230 billion and net income of $16.58 billion, have achieved "fame" worldwide. Company Chairman, Carl-Henric Svanberg has only more recently emerged from the shadows of BP's St James' boardroom but Chief Executive Officer, Tony Hayward is almost now a household name, at least in the UK and USA by any who watch news broadcasts. Unfortunately and most publicly for these executives, they are being held to account for the tragic and devastating explosion on the Deepwater Horizon oil platform in the Gulf of Mexico, which killed 11 men on the evening of 20 April 2010. One of their most vocal accusers is US President, Barack Obama.

Bad enough the fatalities, but the explosion and blowout has caused the worst ecological disaster in American history with oil spewing for long unchecked and at present only partially arrested, from the broken vent on the ocean floor some 5,000 feet below the surface. At the end of June 2010, the oil slick covered an area approximately 260 miles long and in parts up to 130 miles broad and since after the first week of the disaster, the oil has been washing up along the shores of four Gulf States, closing down the fishing and shrimping grounds, wildlife parks and beaches - all very important parts of the affected State's economies - and even where the beaches are not closed, the tourists and sports fishermen are staying away.

Most of the heavy oil pollutants are coming ashore in the Mississippi Delta and to the west towards Caillou Bay, Louisiana. Here, in Plaquemines Parish (County) and in the bayous towards Houma, nearly all the shrimp and oyster beds are closed. Some pockets of heavy pollutants are found to the east of the Delta in the Mobile Bay vicinity, though generally, the shores of Mississippi and Florida have suffered from the lighter oil pollutants and there appears to be little or no contamination east of Fort Walton Beach, Florida. BP will be praying that all their efforts at containment will confine the area to current limits.

An idea of the scale of the accident can be got from the scale of the oil rig and its working environment. The Deepwater Horizon was a state of the art, semi-submersible drilling rig costing several hundred million dollars and the latest of its kind capable of drilling wells down to 10,000 m (32,800') below the mud line in waters up to 3,000 m (9,840') deep. These rigs have on board power supply provided by seven diesel driven generators, totalling 38,720 KW and an emergency generator of 1,250 KW. Two electric pedestal cranes of 60t/20m and 40t/20m for heavy lifts and two knuckle boom cranes with 30t and 12t capacity come as standard.

The main derrick of 2,500,000 lbs capacity is equipped with a rotary table, top drive, travelling block and draw works (1 x 6,900 HP) with the variable deck and column load of 8,500 tonnes and a total payload of 13,500 tonnes. The rig has four 2,200 HP working pressure mud pumps. Accommodation, with recreation facilities, for up to 180 personnel is provided. The total unit weight of 53,718 tonnes is kept in position using 8 x 4,0 MW thrusters with a dynamic positioning system. On the sea floor more than 5,000 feet below the surface, submersibles and robotics were often at work, controlled from a command centre above. The technology was the best in the business. Everything on a large scale, just like the disaster.

On that fateful night of 20 April, the Deepwater Horizon was operating some 40 odd miles south of the nearest point of land at the tip of the Mississippi Delta. Fuel flowing the riser pipe due to a gas blowout is suspected of causing the explosion and conflagration shortly after 10pm. A number of firefighting tenders were very soon on the scene trying to cool the rig in order to get the men off. The thrusters under the rig's pontoons and satellite navigation system which normally held the rig in position had already gone and the only thing keeping the vessel in place and afloat, was the riser pipe tethered to the sea bottom.

The US Coastguard helicopter crews scrambled from their base 115 nautical miles distant knew just how terrible the situation was when they could see the glow from the burning rig 90 miles away. Once within a half mile of the platform, these same crews could feel the heat of the blaze through their helicopter's fuselage. Given the intensity of the fire, it is little short of a miracle that all but 11 of the 126 crew aboard the stricken vessel were saved.

Rescue and firefighting teams, all specialists at fighting fires at sea, were mustered by BP from Louisiana, Texas and Holland, tasked with keeping the rig afloat, putting the fire out and towing the rig ashore. One of the Dutch team arriving on the scene the following day, Joost Van Der Driest, told the UK's Channel Five for a documentary on the accident: "It was not a rig fire really, (it was) a well fire...Unlike anything you have ever seen."

Despite all this effort, the fire on the rig intensified after 24 hours and became even worse after 30 hours when all in the vicinity could hear "the incredible amount of heat degrading the steel" and at 10.22 on the third day, the Deepwater Horizon finally sank.

In North America, "BP", until President Obama reminded everybody of its origins, stands for "Beyond Petroleum". The company is the leading producer of oil and natural gas in the United States and claims to be the largest investor in US energy development, currently employing 23,000 people centred in Houston, TX and owning well-known brands including Amoco, ARCO, am/pm retail outlets and Castrol motor oil.

Over the past five years its investment in the USA has exceeded $45 billion and its fixed assets amount to more than $47 billion. Last year its Solar Energy business sold 162 MW worldwide and BP Wind Energy, a US leader in this sector, produced 1,000 MW from domestic commercial operations and has a further thousand MW soon coming on stream. It is also a major in bio fuels and its aim is to develop this without reducing the supply or increasing the cost of food - a noted criticism from the Green lobby.

BP commenced operations in the USA in 1959 developing the very large gas field on Alaska's North Slope. Currently, its share of known natural gas reserves from Alaska's North Slope fields is over 29 percent and the company is still a major US supplier. However it was in 1969 at Prudhoe Bay, Alaska when BP hit the jackpot with the discovery of oil in what is the USA's biggest oil field. BP became an "oil major", and in reality, could have justifiably renamed itself "AP", American Petroleum, for it is the biggest operator in the Gulf of Mexico - a zone which now produces 25 percent of all US oil consumption - has over 10,000 miles of pipeline, and refines more than 1.5 million barrels of crude per day at its five US oil refineries.

All this has not come without cost to BP in both money, by way of compensation and fines, and reputation. On 23 March 2005 at its Texas City oil refinery, the third largest in the USA, an explosion killed 15 people and injured some 170 others. BP was widely regarded as "having put profits ahead of people" in that they had ignored safety recommendations and not changed procedures due to the costs of implementation. BP has paid over $1.5 billion in compensation to the injured and families of those killed in the accident and is currently fighting a fine of $87 million imposed by the US Occupational Safety and Health Administration.

Earlier this year, in March, Bloomberg News reported that OSHA proposed fining BP and Husky Energy Inc's Toledo,OH refinery $3 million, again for safety violations. Once again, this is being disputed by BP but there has been a fairly steady flow of like accusations which has made it all the easier for President Obama to stage his pieces of political theatre, made directly, by his staff or by committee of political appointees.

Did the President go beyond his legal authority in demanding stoppage of dividend payments for the next three quarters, plus the payment of $20 billion into an escrow account against future payment of damages and lost earnings. Yes, he's the President, not a dictator, but it would have taken a very brave Tony Hayward to say "no way".

However, what's the $100 million for unemployed rig workers affected by the moratorium on drilling in the Gulf of Mexico? That can have nothing to do with BP and was a political decision taken by the President and objected to by many, politicians and others, in the Gulf states. As BP is the biggest operator in the Gulf, will it find itself compensating its own workforce twice?

It has been statements and actions like these and especially those which have suggested that BP has unlimited liability that have frightened the markets and made them react so badly towards BP. Britain's Channel Five has gone so far as to suggest in a recent documentary on the Deepwater Horizon, that it has caused an unprecedented cooling of Britain's relationship with the USA. If BP is bankrupted, Channel Five is surely correct.

To date, everybody is praying that the relief well operations will succeed. The cleanup in the Gulf involves an armada of over 7,000 vessels syphoning up oil in great bladders or burning it off with around 44,500 personnel directly involved. The cost? Maybe BP can get away with $35 billion. And a new stakeholder message - could go back to their roots in the USA and find an orphaned polar bear cub...