TPT March 2011

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88 March 2011 ›
Global Marketplace
› Russia has agreed to buy from France two advanced Mistral-
class amphibious warships, marking the first instance in modern
history of such a major Russia defense acquisition abroad. The
multimillion-dollar sale, announced jointly by Elysee Palace and the
Kremlin, will boost France’s defense industry even as it eases the
country’s 10% unemployment rate. The 24 December declaration
noted that the project will provide 5 million hours of work over four
years for 1,000 French workers at the STX shipyards at Saint
Nazaire on the Atlantic Coast. And it might lead to the purchase of
two more vessels.
› Clean energy is proving profitable for Siemens. In its 2010
report, the German engineering giant disclosed that in the
quarter ended 30 September its renewable energy division
recorded a bigger sales increase than any other unit, rising 48% to
$1.3 billion. New orders to the division, which consists mostly of the
wind power business, rose 85% to $1.9 billion – also a company
best. The unit made $137 million for the quarter, $490 million for
the fiscal year.
Still, the renewable energy unit’s operating profit margin of 10.6%
lagged that of Siemens’s more conventional businesses and fell
short of a goal of a 12%-16% margin. The company’s stated aim is
to become one of the top three suppliers of wind power equipment
in the world, up from eighth or ninth now. Vestas Wind Systems, a
Danish company that focuses solely on wind power, is the market
leader.
› The US government on 14 January cancelled the problematic
“virtual fence” project meant to guard stretches of the vast US
border with Mexico. The system, announced in 2006 and run by
aircraft manufacturer Boeing Co (Chicago), was designed to pull
together video cameras, radar, sensors and other technologies
to detect illegal immigrants and smugglers trying to cross the
porous border. It had cost an estimated $1 billion by the time it
was scrapped, on grounds that it provided too little security at too
great cost. Homeland Security Secretary Janet Napolitano said
that commercially available ultra-light plane detection systems,
unmanned aerial drones, and thermal imaging devices would be
used instead – as well as other equipment suggested by critics of
the Boeing programme.
Oil and gas
The final settlement phase is reached
for claims stemming from the
Deepwater Horizon oil spill
Since the explosion of a BP oil rig in the Gulf of Mexico in April of last
year, hundreds of thousands of claims have been filed for emergency
payments from the $20 billion compensation fund established by the
British oil and gas giant at the urging of the Obama administration.
According to fund estimates, more than $2.2 billion is being paid to
some 150,000 individuals and businesses with documented claims
of damage from the spill. That emergency programme came to an
end in November.
The next phase – the negotiation of lump-sum final settlements
to those affected – has begun. This programme, which will run
for three years, does not require those seeking reimbursement to
give up the right to sue BP or any other company involved in the
disaster. But anyone accepting a final settlement will surrender the
right to file such a claim in the future.
The administrator of the fund, Kenneth R Feinberg, has said
that his programme offers a more attractive expedient than the
court system because of his ability to examine claims prohibited
under the Oil Pollution Act of 1990. That act creates a high bar for
claimants (eg Florida tourism businesses) whose losses relate only
indirectly to the oil spill. Mr Feinberg has said he would consider
such claims.
Despite the many and prompt distributions facilitated by Mr Feinberg,
some critics have charged him with a lack of “transparency.” A self-
professed fan, Governor Mitch Daniels of Indiana, is having none
of it. Mr Feinberg, he said, “has taken on some of the most mind-
bending and difficult sets of judgement calls” ever required of an
administrator. ( New York Times, 24 November)
“He knew in advance there’d be no way to satisfy everyone,”
Mr Daniels told the Times’s John Schwartz. “But somebody had to
do it.”
Of related interest . . .
› Britain is stepping up the number of annual inspections of oil
and gas installations in the North Sea in the aftermath of the
explosion of the BP Deepwater Horizon oil rig in the Gulf. Energy
Secretary Chris Huhne said in London on 11 January that his
department – which was doing 60 inspections a year before the
blowout of BP’s Macondo well in the spring of 2010 – is recruiting
15 new inspectors and will increase the number of inspections to
150 annually. The additional inspections are to be funded through
assessments on the industry.
To review Britain’s preparedness for future emergencies of the
kind, a joint government-industry body – the Oil Spill Prevention
and Response Advisory Group – has been established. Britain will
publish a review of its inspection methods after it has examined the
US presidential commission’s report on the Gulf disaster, Mr Huhne
said.
› That 398-page final report from the National Oil Spill Commission
– published in Washington on 11 January – followed a six-month
investigation into the explosion that discharged 4.9 million barrels
(205 million gallons) of oil into the Gulf of Mexico. The commission
recommended not only that the federal government increase the
budgets of agencies charged with regulating the oil and gas industry,
but also that it remove the $75 million liability cap on economic
damages recoverable from future oil spills.
Bob Graham, a former US senator and co-chair of the commission,
told reporters that its intention was to create “a factual record” of
the incident. Accordingly, no company involved in the disaster was
charged with criminal misconduct. The Department of Justice will,
however, refer to the report in considering legal action against the
leading players in the event which killed 11 workers and led to the
biggest offshore oil spill in American history.
These are: BP itself; Transocean Ltd, the Swiss owner of the oil
rig on lease to BP; and Texas-based Halliburton, which is alleged
to have knowingly permitted an unstable cement mixture to be
used to seal the bottom of BP’s well. In an unrelated matter, the
US Supreme Court on 7 January said it would decide whether a
group of investors may pursue a securities fraud lawsuit as a class