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BP Prudhoe Bay Royalty Trust Message Board

  • mityengr mityengr Jun 1, 2010 5:21 PM Flag

    What Happens to BPT

    if the government expropiates BP assets in the US ??

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    • Sorry but I don`t buy the sky is falling stuff..

      As for the Supreme Crt --- the most `activist` decisions I know of in since the 1960`s Civil Rights acts... are the 2000 Gore V. Bush and 2010 Corporations can directly finance politicians --- both momentous, game changers and passed by conservatives..

      and as far as `domain private properties`... didn`t the court address and clearify that in `Bridgeport, CN` ruling??? late in 2008 -- I know that put the stop to a local Hovnanian project that took over the waterfront for rehab here in NJ...

    • The relationship between BP and BPT is very clear in normal conditions.
      True, BP does not own BPT.
      True BP payment to BPT is a royalty
      True if Prudhoe oil field is sold, the new owner will pay BPT.
      Now, What Obama did with the Chrysler bond holder, they got zepo.
      What Obama did with GM, took it, stock and barrel.
      What Obama is going to do with the landlords of the west, domain the land and make it a national reserve.
      Until Obama, America had certain governance that were out of reach to any government. Today everything is on the table for a grab. Is BPT safe from Obama, open question.

    • Its looking more and more like BP assets will be used to pay for settlements, fines, and damages. Minimum fines for environmental damage are about $1000 per barrel per day X 10-20000 barrels per day times say 100 days or $2 billion. Max fine is at least 5 times that and could be more depending on the wrath of congress. Value of lawsuits could easily top this maximum number.
      The govenrment has already prohibited drilling on Gulf leases which amounts to an expropiation since these become worthless until the rules are rewritten and the mess resolved. This is going to take years not six months. I think I saw that BP had about 40% or more of these deepwater leases. The government could just as easily expropiate ALL BP assets in the US including filling stations, refineries, oil fields etc.
      Personally I think that all BP assets in the US will essentially be expropiated by the US to pay for everything. Overseas assets are a big question mark however.
      It would be nice if BP could get a clean sale of their Prudhoe based assets, but it might not work out that way.
      Supposethe government steps in and expropiates these in lieu of fines and damages. Once they got control, what exactly are they going to do with them and how long would it take to resolve all issues?? What happens tothe dividend meantime?

    • Aren't the assets, which BPT receives revenue on, owned by BP ? If so, when/if the gov't expropriates the assets of BP there would be no revenue to receive royalties on ? I don't know if this logic is accurate but it seems to be the way it might work out. There are better places to put my money right now, why take the risk.

      • 3 Replies to gpd8252
      • Taken from the 10 K of BP Prudhoe Bay Trust 12/31/2009

        THE UNITS
        Each Unit represents an equal undivided share of beneficial interest in the Trust. The Units do not represent an interest in or an obligation of BP Alaska, Standard Oil or any of their respective affiliates. Units are evidenced by transferable certificates issued by the Trustee. Each Unit entitles its holder to the same rights as the holder of any other Unit. The Trust has no other authorized or outstanding class of securities.
        Distributions of Income
        BP Alaska makes quarterly payments to the Trust of the amounts due with respect to the Trust’s Royalty Interest on the fifteenth day following the end of each calendar quarter or, if the fifteenth is not a business day, on the next succeeding business day (the “Quarterly Record Date”). The Trustee pays all expenses of the Trust for each quarter on the Quarterly Record Date to the extent possible, then distributes the excess, if any, of the cash received by the Trust over the Trust’s expenses, net of any additions to or subtractions from the cash reserve established for the payment of estimated liabilities (the “Quarterly Distribution”), to the persons in whose names the Units were registered at the close of business on the Quarterly Record Date.
        The Trust Agreement requires the Trustee to pay the Quarterly Distribution to Unit holders on the fifth day after the Trustee’s receipt of the amount paid by BP Alaska. Cash balances held by the Trustee for distribution to Unit holders are required to be invested in United States government or agency obligations secured by the full faith and credit of the United States (“Government Obligations”) or, if Government Obligations that mature on the date of the distribution to Unit holders are not available, in repurchase agreements secured by Government Obligations with banks having capital, surplus and undivided profits of $100,000,000 or more (which may include The Bank of New York Mellon). If time does not permit the Trustee to invest collected funds in Government Obligations or repurchase agreements, the Trustee may invest funds overnight in a time deposit with a bank meeting the foregoing capital requirement (including The Bank of New York Mellon).

        Read more:

      • You're wrong, but if you don't want to invest in BPT then nobody here is asking you to.

      • BPT is an entirely separate legal entity from BP. BP's share price has plunged across the last 2 weeks, but BPT's is merely reacting to market conditions (i.e. down just slightly). There's really no further connection between the two.

    • BPT is a royalty trust, not a part of BP itself.
      If BP were to go broke, some other company like Exxon would buy the assets and continue producing Prudhoe Bay oil. The royalty owners (BPT owners) get a percent of gross revenue minus transportation costs and bear none of the overhead or maintenance expenses.

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