BP weakness 2011

BP is involved in one of the worst environmental disasters in the US. In April 2010, an explosion
occurred on the Transocean's rig which was drilling an exploration well on BP operated license.The rig was located approximately 41 miles offshore Louisiana on Mississippi Canyon block 252. The explosion killed 11 workers. Subsequently, the rig worth over $500 million sank triggering an oil spill in the Gulf of Mexico, the largest accidental marine oil spill in the history of the petroleum industry. During July 2010, the leak was stopped by capping the gushing wellhead, after it had released about 4.9 million barrels of crude oil. It was estimated that 53,000 barrels per day were escaping from the well just before it was capped. In September 2010, the relief well process was successfully completed, and the federal government declared the well effectively dead. As a responsible party, the company made swift payments to support local economies, and gave a total of $138 million in direct state grants during FY2010, which included behavioral health programs.

BP has also set up the $20 billion Deepwater Horizon Oil Spill Trust to meet individual, business,
government, local and state claims, and natural resource damages. The company provided $500
million for the Gulf of Mexico Research Initiative, which is funding independent research to investigate impacts on affected ecosystems. Furthermore, the company contributed a $100 million fund to support rig workers hit by the drilling moratorium. Overall the company recognized charges totaling $40.9 billion in FY2010 as a result of the incident. To meet its financial commitments, BP announced the sale of up to $30 billion in assets and, by the
end of 2010, had agreed to $22 billion of disposals. Moreover, the Gulf of Mexico oil spill has damaged BP’s reputation, which may have a long-term impact on the group’s ability to access new opportunities, both in the US and elsewhere. Adverse public, political, and industry sentiment towards BP , and towards oil and gas drilling activities generally, could damage or impair the company’s existing commercial relationships with counterparties, partners, and host governments. In addition, responding to the incident has placed, and will continue to place, a significant burden on BP’s cash flow over the next several years, which could also impede its ability to invest in new opportunities and deliver long-term growth.

Explosion in the Texas refinery
In March 2005, an explosion and fire occurred in the isomerization unit of BP Products' Texas City refinery. Fifteen workers died in the incident and many others were injured. In October 2007, the US Department of Justice (DOJ) announced that it had entered into a criminal plea agreement with BP Products related to the explosion and fire. In February 2008, BP Products pleaded guilty, pursuant to the plea agreement, to one felony violation of the risk management planning regulations promulgated under the US federal Clean Air Act. The company paid a $50 million criminal fine and was sentenced to three years' probation.
In addition, the Texas Office of Attorney General, on behalf of the Texas Commission on
Environmental Quality (TCEQ) filed a petition against BP Products asserting certain air emission
and reporting violations at the Texas City refinery from 2005 to 2009, including the March 2005 explosion and fire. In September 2009, BP Products filed a petition to clarify specific required actions and deadlines under the 2005 Settlement Agreement with the Occupational Safety and Health Act (OSHA). That agreement resolved citations issued in connection with the March 2005 Texas City refinery explosion. OSHA has denied BP Products' petition. In October 2009, OSHA issued the Texas City Refinery citations seeking a total of $87.4 million civil penalty for alleged violations of the 2005 Agreement and alleged process safety management violations. The fine was the largest in OSHA's history, and BP Products contested the citations.
Later in August 2010, a settlement agreement between BP Products and OSHA resolved the petitionfiled by BP Products in September 2009 and the alleged violations of the 2005 Agreement. The company agreed to pay $50.6 million of the October 30 fine, while continuing to contest the remaining $30.7 million; the fine had been reduced by $6.1 million between when it was levied and when BP paid the first part. Such events causing environmental damage could result in heavy financial penalties for the company eroding its profits. In addition, such law suits could also tarnish its brand image.

New terminal at Cai Mep is latest in string for southern Vietnam

Hanjin Shipping, MOL, Wanhai and local partner in official launch of 1.1m teu terminal

SOUTHERN Vietnam has a new container terminal following the official launch of Tan Cang Cai Mep International Terminal, a joint venture between Hanjin Shipping, Saigon New Port, MOL and intra-Asia trade specialist Wan Hai Lines.

“We are expecting a lot from this new dedicated terminal in Vietnam as it will soon become a major logistics hub in the region,” said Hanjin Shipping chief executive Se-Hwa Jung.

“Many of major carriers as ourselves are investing in intra-Asia and we believe having a dedicated terminal will help us make a stronger presence in the market,” he added.

Located in Cai Mep, around 50 km south of Ho Chi Minh City, the terminal sits on a 346,000 sq m plot of land on the Cai Mep river.

The terminal has a depth of 15.8m and can accommodate mega-vessels, South Korea’s Hanjin Shipping said .

A spokesperson for the company said it was difficult to define the maximum size of the vessel capable of caling at the terminal because it depended on whether the vessel was empty or not.

With two berths, the terminal can handle 1.1m teu per annum.

Two transpacific services and two Asia-Europe services operated by Hanjin Shipping and MOL have been calling at the terminal since the beginning of Janauary and the number of services using the port was expected to increase in the near future, Hanjin said.

Hanjin declined to reveal the investment amount citing confidentiality.

Already there are a number of terminals in the Cai Mep area.

Hanjin said the Vietnamese government together with a number of terminal operators and shipping companies was developing the region under the Cai Mep-Thi Vai Deep Sea Port Development Project.

Other port projects in Southern Vietnam include Hong Kong-listed Hutchison Port Holdings at Saigon International Terminals Vietnam, in a joint venture with local partner Saigon Investment Construction and Commerce.

Singapore’s PSA is a near neighbour at the SP-PSA facility, a joint venture with Saigon Port and Vinalines. The 14.5 m water-depth terminal started operations in May 2009 and in the final second phase will have a projected annual capacity of more than 2m teu.

While DP World is present 16 km from Ho Chi Minh City at Saigon Premier Container Terminal located along the western shore of the Soai Rap River at Hiep Phuoc, with an estimated final phase capacity of 1.5m teu.

In February APM Terminals said its 1.1m teu Cai Mep International Terminal was nearing completion and expected operations to commence early this year.

Last August, NYK , MOL and trading company Itochu said they were joining forces with Vietnam’s state-owned Vietnam Shipping Lines to invest ¥30bn ($345m) to build and operate a large container terminal in northern Vietnam.

Ranking for the Busiest Ports in the World

There are several factors to consider when ranking ‘the busiest port’ in the world. I would say it depends on the weight of the cargoes, amount of ships, capacity of containers moved. However, volume and number of TEUs are regarded as the most important ranking factors.

According to the American Association of Port Authorities [aapa-ports.org], top ten ports by volume and TEUs are namely:

Busiest Ports By Volume

1. Singapore
2. Rotterdam, Netherlands
3. South Louisiana, U.S.A.
4. Shanghai, China
5. Hong Kong, China
6. Houston, U.S.A
7. Chiba, Japan
8. Nagoya, Japan
9. Ulsan, South Korea
10. Kwangyang, South Korea

Busiest Ports By Containers (TEUs)

1. Hong Kong, China
2. Singapore
3. Pusan, South Korea
4. Kaohsiung, Taiwan
5. Rotterdam, Netherlands
6. Shanghai, China
7. Los Angeles, U.S.A.
8. Long Beach, U.S.A.
9. Hamburg, Germany
10. Antwerp, Belgium