Palatine Financial Issues Alert On British Petroleum

May 28, 2010 - PRLog -- Palatine Financial joined a long line of investment firms this week chastising British Petroleum (BP) for its lack of readiness around the Gulf oil spill.

Marking five disastrous weeks, BP prepared another attempt to slow the oil gushing into the Gulf on Tuesday as a federal report alleged drilling regulators have been so close to oil and gas companies they've been accepting gifts and even negotiating to go work for them. Millions of gallons of oil are gushing into the Gulf, endangering wildlife and the livelihoods of fishermen, as scrutiny intensifies on a lax regulatory climate.  BP's next effort to stop the damaged oil well will be to force-feed heavy drilling mud and cement into the well to plug it up. The tactic, called a "top kill," has never been tried a mile beneath the sea, and company executives estimate its chances of success at 60 to 70 percent.

While it is difficult to determine how deep an environmental scar the gushing underwater well will leave on the coasts of Louisiana, it is even more difficult to gauge just how deeply it has affected the zeitgeist of the investing public. Many are worried that BP’s disaster has had at least as much effect on the downward pressure on equities as the Greek/euro crisis has had. The timing of the BP spill could not have been worse, on the heels of a worsening credit crisis in Greece. As investors began to get nervous and flee from risk trades and other medium term investments, oil -- both the commodity and the related equities -- have struck most investors as the most desirous to be quickly rid of.

Just how many barrels of oil are gushing into the Gulf of Mexico from the Deepwater Horizon spill is a billion dollar question with implications that go beyond the environment. It could also help determine how much BP
and others end up paying for the disaster.

A clause buried deep in the U.S. Clean Water Act may expose BP and others to civil fines that aren't limited to any finite cap -- unlike a $75 million limit on compensation for economic damages. The Act allows the government to seek civil penalties in court for every drop of oil that spills into U.S. navigable waters, including the area of BP's leaking well. As a result, the U.S. government could seek to fine BP or others up to $4,300 for every barrel leaked into the U.S. Gulf, according to legal experts and official documents.

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For more information, please contact Jason Mancini at +39 06 9926 6524 or visit http://www.palatinefinancial.com