BP Officials Step Up Profile on Eve of Capitol Hill Hearings

Posted May 10, 2010 at 1:16pm

Top BP officials, reeling from a massive Gulf Coast oil spill, were trying to boost their communications efforts in advance of back-to-back Congressional hearings planned for Tuesday.

David Nagel, executive vice president of BP America, briefed reporters at the K Street office of BP’s public relations outfit, Brunswick Group. In the seventh floor conference room, Nagel, who has headed BP’s Washington, D.C., office for more than a year, passed out colorful handouts depicting the Gulf of Mexico drilling operation and how officials were attempting to secure the leaky well.

“I’m confident, one way or the other, we will shut off this well,” Nagel said.

He suggested Monday that the oil company could exceed the $75 million limit for liability claims related to the oil spill. Already some Members of Congress have proposed to up the cap in light of the spill caused by the company’s offshore drilling operations.

Nagel told reporters that the company has so far incurred $350 million in expenses on the oil spill effort. As of Sunday night, BP paid out 650 claims totaling $3 million.

He said the $75 million liability ceiling for damages imposed as part of a broader oil pollution law approved in 1990 was “not where our head is at,” as the company tries to deal with the aftermath of the oil rig incident.

“We will process claims,” he said. “We’re not thinking of a top cap of $75 million.”

BP executives are sure to be asked about raising the liability limit on Tuesday as they testify before the Senate’s Energy and Natural Resources and Environment and Public Works committees. Three Democratic Senators, including Frank Lautenberg (N.J.), who sits on the Environment and Public Works panel, and Bob Menendez (N.J.), who is on Energy and Natural Resources, have proposed legislation to raise the liability limits to $10 billion.

The hearings are also expected to focus on BP’s safety record, problems it is having capping the leaking well and the wisdom of continuing offshore drilling.

Nagel declined to say whether the hearings are proving a distraction given that the company and government agencies are still working furiously to cap the well and prevent coastal damage from the oil.

“We’re working to prepare for them,” he said of the hearings, adding that the company has sought to get answers for Congress from various company officials out in the field.

Nagel also declined to say what position BP would take on legislation to raise the cap to $10 billion.

“We will obviously get asked for our view,” he said. Nagel said company officers will answer questions and be “very transparent” on Capitol Hill.

Some Members of Congress are also clamoring for a moratorium on future drilling off the coasts in the wake of the spill. But Nagel said “oil and gas from the Gulf of Mexico is really important.”

Nagel said the British company’s CEO, Tony Hayward, was not testifying because he is in the Gulf region leading the investigation. Rather, Lamar McKay, the president and chairman of BP America, based in Houston, will appear before the Senate panels.

Also testifying will be Steven Newman, president and CEO of Transocean, which owns the oil rig, and Tim Probert, chief health, safety and environmental officer for Halliburton, which was the cement contractor for the drilling operation.

The various responsibilities of the involved companies in the drilling operation will be outlined for Congressional committees Tuesday, BP officials said privately.

Nagel said the Deep Horizon oil rig, which had been used for nine years, had “a very good safety record.” But he said what company officials had believed to be a fail-safe feature on the “blowout preventer” did not work.

He said the oil was leaking from two locations now. The company has plans to drill two relief wells to patch the leak 18,000 feet below sea level. However, that process could take up to 90 days to complete.