• 2 days PDVSA Booted From Caribbean Terminal Over Unpaid Bills
  • 3 days Russia Warns Ukraine Against Recovering Oil Off The Coast Of Crimea
  • 3 days Syrian Rebels Relinquish Control Of Major Gas Field
  • 3 days Schlumberger Warns Of Moderating Investment In North America
  • 3 days Oil Prices Set For Weekly Loss As Profit Taking Trumps Mideast Tensions
  • 3 days Energy Regulators Look To Guard Grid From Cyberattacks
  • 3 days Mexico Says OPEC Has Not Approached It For Deal Extension
  • 3 days New Video Game Targets Oil Infrastructure
  • 3 days Shell Restarts Bonny Light Exports
  • 3 days Russia’s Rosneft To Take Majority In Kurdish Oil Pipeline
  • 3 days Iraq Struggles To Replace Damaged Kirkuk Equipment As Output Falls
  • 3 days British Utility Companies Brace For Major Reforms
  • 4 days Montenegro A ‘Sweet Spot’ Of Untapped Oil, Gas In The Adriatic
  • 4 days Rosneft CEO: Rising U.S. Shale A Downside Risk To Oil Prices
  • 4 days Brazil Could Invite More Bids For Unsold Pre-Salt Oil Blocks
  • 4 days OPEC/Non-OPEC Seek Consensus On Deal Before Nov Summit
  • 4 days London Stock Exchange Boss Defends Push To Win Aramco IPO
  • 4 days Rosneft Signs $400M Deal With Kurdistan
  • 4 days Kinder Morgan Warns About Trans Mountain Delays
  • 4 days India, China, U.S., Complain Of Venezuelan Crude Oil Quality Issues
  • 4 days Kurdish Kirkuk-Ceyhan Crude Oil Flows Plunge To 225,000 Bpd
  • 5 days Russia, Saudis Team Up To Boost Fracking Tech
  • 5 days Conflicting News Spurs Doubt On Aramco IPO
  • 5 days Exxon Starts Production At New Refinery In Texas
  • 5 days Iraq Asks BP To Redevelop Kirkuk Oil Fields
  • 6 days Oil Prices Rise After U.S. API Reports Strong Crude Inventory Draw
  • 6 days Oil Gains Spur Growth In Canada’s Oil Cities
  • 6 days China To Take 5% Of Rosneft’s Output In New Deal
  • 6 days UAE Oil Giant Seeks Partnership For Possible IPO
  • 6 days Planting Trees Could Cut Emissions As Much As Quitting Oil
  • 6 days VW Fails To Secure Critical Commodity For EVs
  • 6 days Enbridge Pipeline Expansion Finally Approved
  • 6 days Iraqi Forces Seize Control Of North Oil Co Fields In Kirkuk
  • 6 days OPEC Oil Deal Compliance Falls To 86%
  • 7 days U.S. Oil Production To Increase in November As Rig Count Falls
  • 7 days Gazprom Neft Unhappy With OPEC-Russia Production Cut Deal
  • 7 days Disputed Venezuelan Vote Could Lead To More Sanctions, Clashes
  • 7 days EU Urges U.S. Congress To Protect Iran Nuclear Deal
  • 7 days Oil Rig Explosion In Louisiana Leaves 7 Injured, 1 Still Missing
  • 7 days Aramco Says No Plans To Shelve IPO
Oil Quality Issues Could Bankrupt Venezuela

Oil Quality Issues Could Bankrupt Venezuela

Falling Venezuelan oil quality could…

Are Oil Markets Becoming Immune To Geopolitical Risk?

Are Oil Markets Becoming Immune To Geopolitical Risk?

The geopolitical risk premium in…

BP Sheds More Assets To Pay For Deepwater Horizon Disaster

BP Sheds More Assets To Pay For Deepwater Horizon Disaster

Kinder Morgan has agreed to buy 15 fuel storage terminals from BP for $350 million in a deal that will help the British energy giant pay the damages and fines resulting from its role in the disastrous 2010 Deepwater Horizon oil spill in the Gulf of Mexico.

BP and Kinder Morgan, the Houston-based pipeline company, will jointly run 14 of the 15 terminals. The sale gives Kinder Morgan ownership of 75 percent of the assets and BP will control the remaining 25 percent. The 15th terminal will be wholly owned by Kinder Morgan.

The British oil company will also continue to use the terminals as distribution centers for its refined petroleum products.

Related: Geothermal Energy Could Soon Stage A Coup In Oil And Gas

“By combining BP’s expertise in product trading and marketing with Kinder Morgan’s strength in operations and terminal development, the [joint venture] is well suited for growth opportunities in high-demand refined petroleum products markets,” John Schlosser, president of Kinder Morgan Terminals, said in a statement.

The deal also will help BP save money, according to Doug Sparkman, an executive at the British oil company. “[The transaction] enables BP to maintain strategic access to terminals nationwide, while reducing operating costs and complexity,” he said on Oct. 20, the day the deal was announced. The sale is expected to close in early 2016.

Related: Present Pain Leading To Future Risks In Oil Markets

The $350 million sale price and the savings in operating costs also will make it easier for BP to pay off the $53.8 billion liability that the company incurred from the spill, the worst oil disaster ever in U.S. waters. That includes $20.8 billion in fines due to the federal government for cleanup and restoration of the gulf and its coastline.

The Deepwater Horizon, a huge rig operating in the gulf off the coast of Louisiana, exploded on April 20, 2010, killing 11 workers and leaking an estimated 134 million gallons of crude oil into the gulf. The breach wasn’t capped until 87 days later.

Related: Future Of Iraq’s Oil Industry Under Threat

The 15 terminals involved in the deal – in the Midwest, the Northeast, the Southeast and on the West Coast – have a combined storage capacity of about 9.5 million barrels of refined products. BP still will retain control of additional terminals in five states, Indiana, Iowa, Oregon, New Jersey and Washington State.

The financial practices of Kinder Morgan and BP lately present a study in contrasts. Since the Deepwater Horizon spill, BP has been selling its properties to settle liabilities, costing the company one-fifth the earnings base it had before the 2010 disaster.

On the other hand, Kinder Morgan, already a major U.S. pipeline operator, has been growing. In 2014 it consolidated its various components into a single company. In July, it bought Royal Dutch Shell’s interest in a joint venture with Elba Liquefaction Co. in Georgia, and spent $3 billion to buy Hiland Partners, a pipeline and logistics concern.

By Andy Tully of Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage

Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News