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Did BP Cronies Sell Stock Early Due to Insider Info?

with one comment

June 17, 2010

Washington’sBlog is reporting that the initial BP oil well blow out may have begun in February:

Did the BP Oil Well Really Blow Out in February, Instead of April?

The Deepwater Horizon blew up on April 20th, and sank a couple of days later. BP has been criticized for failing to report on the seriousness of the blow out for several weeks.

However, as a whistleblower previously told 60 Minutes, there was an accident at the rig a month or more prior to the April 20th explosion:

[Mike Williams, the chief electronics technician on the Deepwater Horizon, and one of the last workers to leave the doomed rig] said they were told it would take 21 days; according to him, it actually took six weeks.

With the schedule slipping, Williams says a BP manager ordered a faster pace.

“And he requested to the driller, ‘Hey, let’s bump it up. Let’s bump it up.’ And what he was talking about there is he’s bumping up the rate of penetration. How fast the drill bit is going down,” Williams said.

Williams says going faster caused the bottom of the well to split open, swallowing tools and that drilling fluid called “mud.”

“We actually got stuck. And we got stuck so bad we had to send tools down into the drill pipe and sever the pipe,” Williams explained.

That well was abandoned and Deepwater Horizon had to drill a new route to the oil. It cost BP more than two weeks and millions of dollars. ..snip..

As Bloomberg reports today, problems at the well actually started in February:

BP Plc was struggling to seal cracks in its Macondo well as far back as February, more than two months before an explosion killed 11 and spewed oil into the Gulf of Mexico.

It took 10 days to plug the first cracks, according to reports BP filed with the Minerals Management Service that were later delivered to congressional investigators. Cracks in the surrounding rock continued to complicate the drilling operation during the ensuing weeks. Left unsealed, they can allow explosive natural gas to rush up the shaft.

“Once they realized they had oil down there, all the decisions they made were designed to get that oil at the lowest cost,” said Peter Galvin of the Center for Biological Diversity, which has been working with congressional investigators probing the disaster. “It’s been a doomed voyage from the beginning.”  read entire post here

Meanwhile, others have reported that:

Goldman Sachs sold $250 million of BP stock before spill

….Other asset management firms also sold huge blocks of BP stock in the first quarter — but their sales were a fraction of Goldman’s. Wachovia, which is owned by Wells Fargo, sold 2,667,419 shares; UBS, the Swiss bank, sold 2,125,566 shares.

Wachovia and UBS also sold much larger percentages of their BP stock, at 98 percently and 97 percent respectively.

Wachova parent Wells Fargo, however, bought 2.3 million shares in the quarter, largely discounting Wachovia’s sales……….

A reasonable observer might conclude that insider information was making the rounds between February and April.  And probably the SEC will be the last to know.

–Claudia

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One Response

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  1. Hi Claudia! Thank you for your visit and comment at Politics Plus.

    On topic, I can’t say they know it would blow, but they had to know that there was a big possibility,given all the problems the site. Insider selling as a hedge would not surprise me at all.

    TomCat

    August 12, 2010 at 9:33 am


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