As part of its commitment to restore the environment and habitats in the Gulf Coast region, BP today announced that it will donate the net revenue from oil recovered from the MC252 spill to create a new wildlife fund to create, restore, improve and protect wildlife habitat along the coastline of Louisiana, Mississippi, Alabama, and Florida. The creation of this fund is over and above BP’s obligations under the Oil Pollution Act of 1990.
BP’s net revenue from the sale of oil recovered from skimming operations and the well containment systems will be deposited into this newly-created fund. At this point, BP cannot predict the total of amount of net revenue that will be deposited into the wildlife fund. The amount of funding will be contingent upon the amount of oil collected during operations and the price at which the oil is sold. BP will provide regular updates on the amount of proceeds being deposited into the fund.
“We’ve already launched the largest environmental response in history, and BP is committed to protecting the ecosystems and wildlife on the Gulf Coast. Proceeds from the sale of oil recovered from the MC252 well will be used to further this commitment,” said Tony Hayward, BP’s chief executive officer. “We believe these funds will have a significant positive impact on the environment in this region.”
The creation of wildlife fund is the latest example of BP’s commitment to help the Gulf Coast states and their residents. On May 24, 2010, BP announced a commitment of up to $500 million for an open research program studying the impact of the Deepwater Horizon incident, and its associated response, on the marine and shoreline environment of the Gulf of Mexico.
We don’t have a specific number yet. This is contingent on the amount of oil collected from skimming and the containment system and the price at which the oil is sold. The collected oil has a fairly high concentration of methanol--a chemical that was injected at the well’s source to prevent hydrates from forming in the LMRP containment system. Consequently, we expect that each barrel of collected oil will sell at a lower price than regular crude.
BP will provide regular updates to the public on the proceeds being deposited into the fund.
Under the Oil Protection Act of 1990, BP is considered a responsible party and is required to fund clean up and restoration of wildlife in the gulf region damaged by the oil spill. BP will meet all of these obligations. The creation of the new fund is over and above these obligations.
What we mean is total revenue generated from the sale of collected oil minus payment of royalties (18.75%) to the US Government. The remaining amount would be considered net revenue. BP’s 65% share of the net revenue will be donated into the fund. (The remaining 35% of the net revenue will be paid to the co-owners of the leasehold interest.)
In other words, BP will donate its share of the net revenue (approximately 53% of the total sales figure) to the fund.
The fund will provide money to wildlife programs in the four gulf states (LA, MS, AL, FL). The fund will pay for programs over and above any required under OPA. These funds will be made available to state agencies and non-profits that are focused on wildlife protection and restoration. Specifics on the funding mechanism, and projects, have not been determined at this time.
Revenue going into the fund will end when the MC252 well is killed and oil is no longer coming from this source.
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