The 5 Dumbest Things on Wall Street: Jan. 20
2. Chevron Does Shakespeare
Just as oil giant BP (BP) suffered the slings and arrows of global opinion following the 2010 Deepwater Horizon spill, fellow oil major Chevron (CVX) is finding itself in a sea of troubles as a result of its own outrageous misfortunes.
Yes, it's all quite tragic. And not just for Chevron stockholders who've seen their shares drop 3% in the past week while the S&P 500 has climbed nearly 1%. Alas, all the world is Chevron's stage, and lately they have been one pretty poor player.
Let's start in Nigeria, where Chevron said Tuesday it was still searching for two contractors who remain missing after an offshore rig caught fire Monday. The company said two more workers are still in the hospital with minor burns while 152 were safely rescued. Chevron, which maintains it has no idea what caused the accident, said the natural gas well was still burning Tuesday.The good news from Nigeria, however, is that only about 13 barrels of fuel have been spilled from a rig that pumped out more than 2,000 barrels per day. That is good news compared to the 2,400 barrels that leaked from its drilling platform off the coast of Brazil last November. And Chevron has not even begun to pay for that. And just last month, Brazil's oil industry watchdog ANP issued a third citation against Chevron for the oil spill at the Frade offshore field. ANP, which has not decided upon a full penalty, has the authority to fine Chevron up to 50 million reals ($26.8 million) for each citation. The Brazilian regulator says Chevron failed to put in practice procedures that would slow the depletion of reservoirs at the well. And staying in South America, all's not well for Chevron in Ecuador either. Two weeks ago, an Ecuadoran appeals court upheld last year's landmark $9.5 billion judgment against the company over oil field contamination in the Amazon rain forest. Chevron has delayed paying the penalty so far, and has instead chosen to wage a legal battle in U.S. and international courts to block enforcement of last year's verdict. As a result, don't expect Chevron to do much drilling in Ecuador anytime soon, or for that matter, in Bulgaria, where this Tuesday the government banned Chevron from exploring for shale gas anywhere in the country. Actually, the Bulgarian energy minister said that "Chevron can still have the right to test for oil and gas" -- it just can't use the controversial technology of hydraulic fracturing known as "fracking." To be honest, considering Chevron's luck lately, it's hard to blame the Bulgarians - or anybody - for cutting the company off. Because if the question is to drill or not to drill? with regard to Chevron, well, we don't have to sleep or dream to come up with the answer. Right now it seems pretty clear.
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