As BP stock continues its downward spiral, the US government has announced the launching of a criminal investigation of the company’s activities related to its environmental assault on the Gulf of Mexico.
US attorney general Eric Holder confirmed on Tuesday while in New Orleans that a criminal probe of oil giant BP is now underway by federal agencies, including the FBI.
"As our review expands in the days ahead, we will be meticulous, we will be comprehensive, and we will be aggressive," Holder said to a group of reporters on Tuesday. "We will not rest until justice is done.”
Holder’s announcement has cast another shadow on BP activities before and during the oil spill, the country’s largest oil spill in history and perhaps the greatest environmental disaster in its history.
Confirmation of the investigation caused a harsh reaction on the stock market where BP shares fell 13 percent on the FTSE 100 Index. Overall, BP’s market value has crashed by 36 percent since its mishandling of the environmental catastrophe began on April 20, The Guardian reports.
One stockbroker, Arbuthnot, is on record as stating the Gulf of Mexico disaster “has a real possibility of breaking the company.”
The announcement of the investigation comes after BP’s most recent failure in attempting to stop oil from pouring into and onto the Gulf’s waters, a “top kill” operation in which 30,000 barrels of mud were pumped into the deep well during a three day effort.
The company’s newest attempt at oil spill and environmental disaster prevention is the fitting of a containment cap over the broke pipe gushing oil into the water. Remote-controlled robots are attempting to cut the collapsed 20” well pipe and place a 21” cap over it, all this occurring almost a mile below the Gulf’s surface.
White House Photo by Pete Souza
The President meets with the BP Oil Spill Commission Co-Chairs in the White House
Government scientists believe cutting the pipe may increase the flow of oil escaping from the wellhead by as much as 20 percent. However, BP does not expect a significant increase in the spewing oil. In a long line of statements by Doug Suttles, BP chief operating officer, he states the oil leak may soon be contained. “If everything goes well, within the next 24 hours we could have this contained,” he said, according to the BBC.
The company’s relief well operation is still underway, and barring any mishandling during that attempt, may be completed by early August, a time when hurricane activities are reaching a peak. Fears of an active hurricane season have added to the drama of BP’s dilemma, a dilemma that now includes the possibility of a failed oil company.
Work crews clean tar balls from the beach in Grand Isle, LA
David Bulk of BGC Partners questions the survival of BP management. "Tony Hayward has been an excellent CEO until this disaster and would appear to have been unlucky. However the buck sticks with the man at the top. If BP's share price continues to fall, it could become a takeover target. There are so many imponderables over whether its liabilities would be capped or not," he stated, according to the Guardian report.
Regardless, the Obama administration believes the oil giant will be able to survive the disaster, even as the company’s costs in relation to the calamity approach $1 billion, so far.
Robert Gibbs, White House spokesman, said: “You've got a company with the type of market capitalization that can and will fully pay for the damage caused by the disaster they are responsible for."
Six weeks after the beginning of that worst oil spill in US history that has so far claimed the lives of 11 workers, President Barack Obama said: "If our laws were broken leading to this death and destruction, my solemn pledge is that we will bring those responsible to justice on behalf of the victims of this catastrophe and the people of the Gulf region," according to Reuters.
Obama has made only two brief trips to the Gulf coast region since the catastrophe began and in a photo-op during his most recent visit he was seen with a tarball in his hand.