BP to give collected oil proceeds for wildlife

BP Plc on Tuesday said it will donate net revenues from oil recovered from its stricken Gulf of Mexico oil well to restore wildlife habitats on the coastlines of four affected Gulf Coast states.

"BP is committed to protecting the ecosystems and wildlife on the Gulf Coast," BP Chief Executive Tony Hayward said in a statement.

He said proceeds from the sale of oil recovered from the seven-week-old leak a mile beneath the water's surface "will be used to further this commitment."

The possibility that BP might profit from sales of oil collected from the leak has fueled criticism toward the company.

John Hofmeister, former president of Royal Dutch Shell's U.S. operations and author of "Why We Hate The Oil Companies" said BP's plan was appropriate.

"It's a diminimous amount relative to the total BP daily oil production, but symbolically, under the circumstances, it's the right thing to do," Hofmeister said.

BP's seabed oil collection efforts have brought in more than 73,000 barrels (3.06 million gallons/11.6 million liters).

Of that, 22,000 barrels (924,000 gallons/3.5 million liters) came from a tube inserted into a leaking pipe last month. That pipe was sheared from seabed equipment at the wellhead last week, and a containment cap placed atop its remnants has collected more than 51,000 barrels (2.1 million gallons/8.1 million liters) so far, according to BP.

At Tuesday's closing price of $71.99 for U.S. crude futures on the New York Mercantile Exchange, 73,000 barrels would sell for about $5.2 million.

That is a small fraction of BP's daily global production of 4 million barrels a day in the first quarter of 2010.

A smaller fraction would be oil collected by skimming operations (left), which has reached about 368,000 barrels of oily water so far. BP spokesman Jon Pack said that as gathered, the oily water is taken to various Gulf Coast refineries to separate water from the oil so it can be processed.

Pack couldn't say how much skimmed oil has been separated from water.

BP doesn't own all the oil. Its partners, Anadarko Petroleum Corp and Japanese trading house Mitsui & Co Ltd own 25 percent and 10 percent, respectively. They would be owed proceeds on their portion of any sales.

Also, 8.7 percent of sales are owed to the U.S. government in royalties, Pack said.

The net revenue BP would donate to habitat protection and restoration would be its portion of the sales, he said. BP has spent more than $1 billion so far on the overall response to the spill, from sea to shore, including efforts to rehabilitate oiled wildlife.


Source:
Reuters, "BP to give collected oil proceeds for wildlife", accessed June 7, 2010