Gulf of Mexico Oil Spill

Lord Jones of Birmingham Excerpts

Monday 14th June 2010 Lords Chamber

[Lord Marland]

Obviously, I cannot go into specific detail as to insurance coverage; that is for the companies and their balance sheets. I admit that I used to be in the insurance business and have a rough idea of what is going on. I am sure that some insurance salesman will be keen to sell a little more as a result. The message that we have received from the London insurance market is that the insurance companies are there to pay for the losses, which they have already estimated. They are in the process of providing for those losses and, indeed, have already paid north of half a billion pounds-worth to some of the companies involved.

My noble friend put his finger on a broader point. Only 65 per cent of the oil well was owned by BP; 25 per cent was owned by an American company called Anadarko and 10 per cent by Mitsui. As regards the drilling well itself, Transocean was the drilling contractor, Cameron was the manufacturer of the blow-out preventer, Halliburton was responsible for the cement casing, and we should give great credit to BP that it has stood up to be counted through these very difficult times and has been prepared to stand in the spotlight. It has behaved extremely properly in this regard, as one would expect of a major multinational corporation.

[Lord Jones of Birmingham]

My Lords, I thank the noble Lord, Lord Hunt of Kings Heath, for an excellent exposition of the consequences, and I am grateful to the Minister—especially for his last comments. Perhaps I may ask for his response on two aspects. First, the Statement in another place mentioned that the payment or not of the dividend from BP, which concerns pension funds on both sides of the Atlantic and will further affect the share price in one way or another, was a matter for BP and did not concern this Government. I should welcome the noble Lord’s comments on the fact that that is clearly not the attitude of the gentleman to whom the Prime Minister spoke on the telephone over the weekend, given that President Obama made it very clear that it is very much the business of the White House as to whether BP pays a dividend. How will this Government stand up and be counted on behalf of the pensioners of Britain?

Secondly, the Statement mentioned, and we read last week about, the possibility of criminal proceedings coming out of this. Will the attitude of the United Kingdom to any request for extradition of people who might be indicted be, I trust, the same that the Americans would apply to any request to extradite people from America to Bhopal in India?

[Lord Marland]

The noble Lord poses some interesting questions. He knows as well as I do that BP is a $100-billion company with a $35-billion cash flow—even after the recent reduction in its share price. It is in a strong balance-sheet position to suffer the losses from this horrendous disaster. The noble Lord may also know that BP pays its dividend quarterly, unlike many corporations. The BP board has agreed, and is committed, to a review of that position before 27 July and we are in that period. The noble Lord would not expect me to comment on criminal proceedings, would he? I am afraid that that is a matter for the law courts, not me. Doubtless we will follow the issue with interest. As regards the Government, I admire the way that the Prime Minister, David Cameron, has handled this matter; he has dealt with it in a calm and steady dialogue, rather than volatile rhetoric. In these circumstances, we have to be very careful to follow that path, because there is an awful lot at stake, as I hope I mentioned in the Statement.