Return to Transcripts main page
Quest Means Business
BP Disaster, One Year Later; Down Near Three-Year High; Closing Arguments in Galleon Insider Trading Scandal
Aired April 20, 2011 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: BP's deepwater disaster. One year on, did this crisis change the oil world?
Feeling chipper? The Dow is at a near three-year high, nearly 200 points.
And in New York closing arguments are heard in the Galleon trial, the insider trading scandal that hit Wall Street.
I'm Richard Quest, we have an hour together, and I mean business.
Good evening.
Today we mark the one-year anniversary of the Deepwater Horizon disaster in the Gulf of Mexico, in which 11 men lost their lives. President Obama has paid tribute to those who died and to the thousands of people involved in the operation to clean up after the worst-ever U.S. oil spill. To commemorate the men's deaths relatives are flying over the Gulf of Mexico. While on land, Louisiana, Mississippi, Alabama, and Florida will hold vigils.
The platform, Deepwater Horizon, burned for two days before sinking to the sea floor. For the next 87 days oil gushed from the well. By some estimates, more than 200 million gallons of oil were released into the water. It threatened the environment and the livelihoods of those who live in the Gulf. And there, of course, is the financial cost. BP, the company at the heart of the disaster, put aside $41 billion to pay for the spill. The damage to their reputation has been considerable.
So, that was then. Now, 12 months on, some of those living in the Gulf of Mexico are worried that the local economy will never recovery. CNN Special Correspondent Philippe Cousteau has been monitoring the Gulf Region for the past year. Philippe joins me now live, from Grande Isle, Louisiana.
Philippe, we know the size and the scale of what happened. Now, you tell us what the affect 12 months on has been.
PHILIPPE COUSTEAU, CNN SPECIAL CORRESPONDENT: Well, one of the scary parts about the effects here in the Gulf of Mexico is that we still don't understand what they are fully. But just because we don't understand them, because this is a very large, very complex ecosystem, doesn't mean that they aren't considerable.
Of course, reports of dead dolphins, much more numerous than any years past, and dead sea turtles, thousands of dead birds, and even reports of fish with lesions growing on them and compromised immune system, is concerning many of us that this will continue to be a very serious problem over the coming years and decades. And of the last few days I spent quite a bit of time with local individuals, fisherman, oysterman, and shrimpers.
(BEGIN VIDEOTAPE)
COUSTEAU (voice over): Henry McAnesby has been fishing in these waters for 35 years. But when he first started this habitat looked much different.
(On camera): It is hard to imagine, as I look out here, this is all, pretty much, water.
HENRY MCANESPY, FISHERMAN: Right.
COUSTEAU: There are little spits of grassy marshland here and there.
MCANESPY: Right.
COUSTEAU: You are saying that most of this was land before?
MCANESPY: 80 percent of this, in back of us, there was a little bitty pond right there. It is all gone. There was nothing but land all around here. This was solid land when I first started fishing.
COUSTEAU (voice over): Even before the Gulf oil spill, the southeastern part of Louisiana was affected by the oil industry. Oil companies cleared marshes here to lay pipelines and form channels for boats that service the oil industry. The remaining marshland is being lost to erosion.
CHRIS DORSETT, OCEAN CONSERVANCY: And when you start to loose these habitat areas, you loose the ability for the young fish and shrimp to be able to hide, to grow up to a size where they can survive better out in the open water.
COUSTEAU: Henry began oystering again in February for the first time after the oil spill. He says this year the oyster beds are behaving differently.
(On camera): So, it doesn't seem like there are a lot of baby oysters.
MCANESPY: No, there are no baby oysters. That is what is scary. This should be full, full, full, of oysters the size of your fingernails. They should be blistered all over this thing.
COUSTEAU (voice over): Oyster larvae normally grow on the shells of mature oysters. But they are not growing on the oysters in this area.
MCANESPY: If you don't have tomorrow's oysters you'll go out of business.
COUSTEAU: For lifelong oystermen like Henry, their livelihood depends on this ecosystem recovering.
(On camera): Not only has there been a significant impact on the oyster fishery, but the Deepwater Horizon oil spill happened right at the beginning of the shrimping seas last year. Essentially closing all waters to any fisheries. This year, at the beginning of this next season, there is a lot of uncertainty of what the future will hold.
(Voice over): At this marina shrimpers prepare their boats for the coming season.
PHAN PLORK, SHRIMPER: I think there is going to be a little bit of shrimp out there, you know? The problem is that the market, consumers, that is what I worry about.
COUSTEAU: For this hard-hit community, last year's losses were extensive.
SANDRA NGUYEN, COASTAL COMMUNITIES CONSULTING: After the BP spill we- I did a lot of food stamps applications, because we were immediately impacted. We lost our season, we didn't have the money. See fishing is not a get rich business, but if you do it right you live comfortable.
COUSTEAU: And the fisherman in this community are not giving up.
PLORK: I want through starvation as a kid in Cambodia, and got to the United States. This is the land of opportunity. I'm sure there are plenty of things for me to do.
COUSTEAU: Many in this area hope the Gulf Coast environment is a resilient as the community it supports.
(END VIDEOTAPE)
COUSTEAU: So the real long-term story is the uncertainty. There is a lot of concern here in the communities about lack of knowledge about what is going to happen. But we do know, and I've heard from scientists at the Ocean Conservancy, for example, that after the Prince William Sound, in Alaska, the Exxon Valdez oil spill in 1989, it took fully three years for the herring fishery to collapse and it still hasn't recovered. And we were down in northern Mexico, along the coast, in November, looking at the aftermath of Ixtoc oil spill from 1979 and there was still oil along the coral reefs and the mangroves. So, the only certainty that we do know at this point is that this will have a long-term impact for decades to come.
QUEST: And as I listen to your report and I listen to what you say then, there is an element of depression about it. It seems, Philippe, as if we learn nothing. These events happen again and again. And all we can do, as you can tell us, is the effects go on forever.
COUSTEAU: Well, Richard, I think you are absolutely correct, these events do seem to continue happening. And the question is, when will we learn? At the end of the day a lot of people blamed BP. And certainly there was-that organization was at fault for what happened. But we all are at fault in our continuous, gluttonous consumption of fossil fuels. And the question is when are we going to be able to break that addiction and start building a healthy future. And that is what we all need to be asking ourselves.
QUEST: Philippe Cousteau joining us live from Louisiana. We thank you for that, and for that report
We started our coverage tonight, very deliberately, in the shrimping, and the fisheries, and in the environmental affect. But the fallout from the spill changed the face of the deepwater drilling industry. And there, too, things are hardly back to normal.
If you will join me in the library, you'll see what I mean. When it comes to deepwater drilling there was the moratorium that was issue in May 2010. The government wanted a regulatory overhaul. That moratorium has been lifted for oil companies with a suitable safety record. But even so, even with a regulatory overhaul underway, the head of the regulatory department says more needs to be done, much more.
(BEGIN VIDEO CLIP)
MICHAEL BROMWICH, DIR., BUREAU OF OCEAN ENERGY MANAGEMENT: We desperately need more engineers, inspectors, and other safety personnel. We desperately need more environmental scientists and more personnel to do environmental analysis. We desperately need more personnel to help us with the permitting process, and much more.
(END VIDEO CLIP)
QUEST: It is easy to say when you hear that, stop the moratorium-or stop the drilling, and at least wait and see. But you can't do that, if only because of the hundreds of thousands of jobs that rely on it. And as Philippe Cousteau was saying, the need for the oil involved.
So, new permits have returned, 11 since February, in deepwater areas. Although that is far less than normal, it is a relief for those who rely, the tens, if not hundreds of thousands of jobs that rely on deepwater oil drilling.
As for the fund, the $20-billion fund, that BP set up in trust, amongst other monies as well. Only 19 percent has been paid out at the moment. There are large number are being rejected. And those that are rejected, event he appeals process upholds the rejection. So it is still a long way clear, or far from clear that this is actually being a workable solution.
For the companies who are working, and the vast quantities of oil from the deepwater rigs, the rules have obviously changed. And many oil rigs are still silent, even though the moratorium may be over. Poppy Harlow has been out to Shell's platform to see what has changed.
(BEGIN VIDEO CLIP)
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: We are on the Mars platform. Just take a look we are about a 150 miles out from the coast of New Orleans. Below us there are 24 different wells, drilling thousands and thousands of feet down, into the Gulf. So, oil production here goes on 24 hours a day, seven days a week. It never stops.
How has the spill impacted the way deepwater drilling here in the Gulf is going to go for the foreseeable future? What has changed?
MARVIN ODUM, PRESIDENT, SHELL OIL COMPANY: Well, there are a couple of things that have changed in a significant way and that is you heard Shell, and Chevron, and Exxon, and Conoco Phillips make an announcement shortly after the spill. They said, we are going to build, and we committed $1 billion to build a containment system in the event that there was ever another spill like that in the Gulf of Mexico; that any leaking oil could be captured and brought to the surface and contained, rather than spilling into the ocean.
HARLOW: Shell monitors its deepwater drilling in the Gulf around the clock, from this operation center in New Orleans. And says it can help prevent disasters like the Gulf oil spill.
(On camera): We basically have one station operating right now?
Right, right.
HARLOW: Monitoring drilling in the Gulf.
Yes, because right now this is the only drilling rig that we have active in the Gulf, drilling an injector at the Mars platform. We don't have any other active drilling rigs.
HARLOW: Is this because of the moratorium?
JOHN HOLLOWELL, EVP, SHELL UPSTREAM AMERICAN: As a result of the moratorium that was issued by the Department of the Interior.
HARLOW: After that?
HOLLOWELL: No drilling activity means nobody manning these stations.
HARLOW: It took months to plug the hole after the BP spill. Do you have to prove now that you have the technology to plug that hole, pretty quickly, if that were to happen on one of your rigs?
HOLLOWELL: We have to prove that we have the capability to cap the well. Hopefully cap and contain it as it is. And we also have to prove that we have the ability to respond to it in the very unlikely event that it was to occur again. We are able to do that through our participation in the Marine Well Containment Corporation. And we have an interim response equipment and a scenario that allows us to do that.
HARLOW: Did you have to prove that before the disaster in the Gulf a year ago?
HOLLOWELL: No.
ODUM: One of the main things, and this is a Shell standard, if you will, the way we drill deepwater wells around the world. In every well that we drill, anywhere during the drilling process we do it in a way, mechanically, such that if we had a problem with the well, you could put it a cap on it and you can shut it down. Stop any leak there. And that well will be strong enough to hold any pressure that it will see in that drilling operation.
And so that effectively, you know, would have stopped the problem that we saw last summer.
HARLOW: Overall, what would you say the spill here in the Gulf a year ago has cost Shell, in terms of having idle, idle production?
ODUM: Well, it is a difficult thing to say exactly. I can tell you that it is at least $100s of millions. The-I can put it in production terms. When I look at now my business in the Gulf of Mexico for 2011, we will produce an average of about 50,000 barrels a day less than what we would have without the moratorium.
What is this showing us?
UNIDENTIFIED MALE: This is showing us how many barrels we are pumping to town. How many barrels of oil we are pumping to town through this one meter.
HARLOW: How many barrels a day go out of this rig?
UNIDENTIFIED MALE: Out of the whole, out of Mars, as a whole, about 90,000 barrels.
HARLOW: 90,000 barrels a day.
UNIDENTIFIED MALE: 95,000 to 90,000 barrels.
HARLOW: What is the biggest misconception about deepwater drilling?
ODUM: Mmm, I think the thing I worry about most, it relates back to the spill, because that is I think where most of people's perceptions come from now. And I think there was a perception that built up during part of the response to that spill, that said, doesn't the industry actually have the technology to do this? Should we be down there?
HARLOW: Does it?
ODUM: And the answer is, yes, we do. So the amount of work and the ability of us to prevent any well that is being drilled from ever getting to the situation we saw last summer, is very, very good.
HARLOW: What do you think the future of Shell's deepwater drilling here in the Gulf is going to be? Do you foresee many more platforms like the one we're on now?
ODUM: I hope so. I mean, a lot of that is up to the government and how we choose to develop our own resources, as a country. You know, we are the second largest operator in the Gulf of Mexico. That for us, from a physical standpoint means we have six major facilities or hubs across the gulf in the deepwater. With the discoveries we have already made we can add three more hubs to that. So three more facilities like we are sitting on today, just with what we have already discovered.
HARLOW: But it is really all reliant on the government? Getting that stamp of approval?
ODUM: That's right. We need the permits to do that. Now, I personally have confidence that we are going to get back there. The real question for me is how long is it going to take us to get back to a more normal pace of work in the Gulf of Mexico.
HARLOW: Poppy Harlow, CNNMoney, New Orleans.
(END VIDEOTAPE)
QUEST: And later in QUEST MEANS BUSINESS, as we can consider and continue looking at this oil spill, we are look at the affects that it had on BP. That is in about 20 minutes, 15 minutes from now.
After the break, the latest tech earnings are pleasing to investors. But what does it mean for the Q25. And cashing in on China, Dell is going indigenous in its most important market and you'll hear from Michael Dell after the break.
(DESK BELL CHIMES)
(COMMERCIAL BREAK)
QUEST: Now a stack of earnings reports are fueling at tech rally on Wall Street today. And we need to look at what has got investors all fired up. So, we have a variety of companies, and they'll all get a various chip, a green or a red. I'll explain that in just a moment.
First, though, let's look at the companies, or some of them. Intel is our first one, Q1 revenue was at an all time high, $3.2 billion. And that was a very strong performance, up 29 percent on Q1 of last year. Slightly disingenuous of course because it was such a dreadful quarter this time last year. The Chief Financial Officer Stacey Smith expects new products to further boost that growth.
(BEGIN VIDEO CLIP)
STACY SMITH, CFO, INTEL: We're now bringing out products over the course of 2011. That will compete and start winning designs in tablets and phones and so we believe that, you know, we can participate and win, and grow our market across servers, across notebook computers, and across these other devices that compute and connect to the Internet. So, it is a pretty exciting opportunity for us.
(END VIDEO CLIP)
QUEST: Well, the difference a company makes in the tech sector. Intel up 29 percent, Yahoo! down 28 percent. Now that was very much what the market had been expecting. Still made $223 million, but even so, Yahoo! is not considered to be in a particularly-well, it is not an impressive performance and you'll hear more about that when we Q25 it. As for AT&T, 36 percent growth increase, $3.4 billion. And interestingly, of course, AT&T very much in the mood, if you like, with its takeover of T- Mobile, in the United States.
So, we move to find the criteria that these companies need to pass if they are going to get the green in the Q25. You will be familiar with them. We don't need to go into huge detail. But if you get four or five of a green or a red, that is your automatic color. Three or two in either direction and we have a debate. And today's debatee is, of course, Felicia Taylor, joining me from New York.
Now, be gentle with our Q25ers. Let's start with Intel; four out of five so it is an automatic green. We don't have any discussion on this. But there is plenty to talk about the results.
FELICIA TAYLOR, CNN FINANCIAL CORRESPONDENT: Yes, I mean, this company is doing great. Everybody was worried about whether the PC market was slowing down. They thought it was going to hurt the company. It really hasn't. As you can see, four out of five, it is a top one. There is no question about it. It's a green, absolutely.
QUEST: All right. We can put that to one side. Instead, IBM, now, if we look at IBM, one out of five. It is an automatic red. How can we have Intel, which makes-
TAYLOR: Yes, you know-
QUEST: Hang on. How can we have Intel, which makes the chips, for the computers? But IMB, which is a dog-and yet, "The New York Times" said it had exceeded its numbers. So, is there a contradiction in our Q25, here?
TAYLOR: Well, I don't think of it as a contradiction. You know why? Because it did do better than expected, but it fell short on its new services contracts. That is a big deal. The stock right now is down a 0.5 percent. So the market doesn't like what it sees either. It is frankly, not good enough. It is still a bellwether of the tech sector, but it is not doing well enough in terms of the competition. And we don't know how Japan will have affected this company yet. So there is a tail to be told that we just don't know yet. So, I'm with you on the red.
QUEST: Which proves a point, that why we have these criteria, which are extremely strict. They give the guidance because the headline number and the exceeding of expectations may simply be a load of baloney as they say.
Now, Yahoo!: Yahoo, two out of five, it is an automatic red. It just didn't manage to make the grade. What is wrong with Yahoo!?
TAYLOR: You know you almost want to ask, what is right at Yahoo!? It had a decline in earnings and revenue. It is pressing ahead with a turn around effort, but it is not really quite making it. Businesses have stabilized, but it is not exactly forging ahead. It is not exactly doing better than the competition. It is alliance with Microsoft isn't growing very well. The profit growth was not a great number. Sales was-a drop in 24 percent. The company just isn't making it. It is not doing well. However, the stock market likes it. The stock is up 5.5 percent.
QUEST: Oh, come on. So-so-
TAYLOR: I think it is a red.
QUEST: Well, we have given it a red, under our criteria, but does that make a nonsense of our red?
TAYLOR: No, I don't think so. Yahoo isn't standing up to the competition. Who really-who uses Yahoo!? Where is its growth? Where is its prospects? Where is its new subscribers? I mean, don't think it has- no, I don't think our criteria is silly at all.
QUEST: All right, AT&T.
TAYLOR: It's demanding.
QUEST: It's demanding. Let's face it, when Felicia Taylor is demanding, you had better be on your mettle.
AT&T, AT&T got three out of five. So we have a debate about.
TAYLOR: Yes.
QUEST: It has the Sprint deal-I'm sorry, the T-Mobil deal, coming along.
TAYLOR: T-Mobil, yes.
QUEST: It didn't have such a bad time when Verizon got the iPhone 4, but even so its subscriber numbers were down.
TAYLOR: Yes, they were down 88 percent. Not just a little. I mean, wireless subscriber growth tanked from year ago. And you are right, I mean, iPhone started to be sold by Verizon, it's competitor, and that narrowly avoided a net loss of subscribers. So that is the biggest problem. We don't know if T-Mobil will actually, you know, fill that gap for it. So, I give this a begrudging green.
QUEST: All right.
TAYLOR: The stock is down .25 of a percent
QUEST: It is a grudging green, that we give it, there.
Finally, going to have to brief on this one, United Technologies, it got three out of five. It wasn't a company-it is an important company. The results didn't excite me terribly when we looked at them. It is performing well. I'm going to say it is a green. You disagree.
TAYLOR: Yes. No, I don't disagree and here is why. It came in better than estimates, 19 percent year over year increase in earnings. It has sustained cost reduction efforts. New equipment orders were up. Its different businesses have all done quite well. Otis has done well. Carrier Air Conditioners have all done well. Those were up 26 percent. Pratt & Whitney was up, too. This is a good one. This is green.
QUEST: Not even a grudging one. Felicia, we are half and half between the greens and the reds. Lovely to see you. Hopefully we'll see you tomorrow. Felicia Taylor, who joins us from New York.
A one-time billionaire faces a grim possibility of years behind bars. The insider trading trial of the fund manager Raj Rajaratnam is nearing its end. We're live at the Manhattan courthouse in just a moment. This is QUEST MEANS BUSINESS.
(COMMERCIAL BREAK)
QUEST: The landmark insider trading trial of the former hedge fund manager Raj Rajaratnam is nearing its conclusion; closing arguments in a Manhattan courtroom. The prosecution insisted the co-founder of the Galleon Group knew, in their words, "tomorrow's news today" and that meant big money, more than $63 million.
Today's final statements come after six weeks of testimony. Raj Rajaratnam's defense team has said the one-time billionaire didn't trade on secret information. If convicted he could be sentenced to as many as 25 years in prison.
Maggie Lake is in New York and Maggie joins me now from outside the courthouse.
Maggie, let's do procedural issues first. When do you think this case goes to the jury?
MAGGIE LAKE, CNN FINANCIAL CORRESPONDENT: You know, Richard, we thought it could as early as first thing tomorrow. But a little bit of a surprise here. The prosecution has been doing its closing arguments all day long. They are on a short break now. He is going to come back and finish up. People are surprised at the length of this.
It has been a methodical, lengthy detailed recapping of the evidence put forward. He even replayed some of those all important wiretap conversations, got specific again about the stock cases. In fact, at one point he said the wiretaps were the smoking gun that pointed to a quote, "corrupt network of insiders". He said Raj Rajaratnam was scheming all along to cover this up. And once again, sort of underscoring that this was inside information, something that you couldn't get a hold of through any sort of public means. He has got to finish up. He's expected to come back and do another hour and a half, perhaps.
Then the defense has to present their closing argument. So we are not clear if that is going to roll into tomorrow and when the jury gets the case, complicated by the fact that Friday there is no court being held. So, we're getting close. And of course, it is all going to rest on the jury once they get the case. Remember, criminal case, they have to find guilty beyond a reasonable doubt, Richard.
QUEST: Right, and of course, at this stage in the proceedings it is always very difficult to gauge, and indeed, bordering on improper, to gauge how a case is falling out, one way or the other. But we can say, can't we, Maggie, Wall Street is watching this very closely.
LAKE: They certainly are, Richard, this is a very important case and the reason we are here. It is not just about Raj Rajaratnam. This is about the government's ability to crack down on what they say is a rigged system, a system that is stacked against the individual investor. Important here are these wiretaps. If the government is able to get a guilty charge and a guilty charge on many of the counts, it is going to be a new chapter and the effectiveness of this wiretapped information, we have been playing them throughout the trial. They have been very convincing. They have lead a lot in the legal community to believe that the prosecution has a strong case. If it works this going to set the standard now and this tool, which has been so effective in going against the mafia, organized crime, drug trafficking, can really be used against Wall Street. So that is why people are watching this so very closely.
QUEST: Maggie Lake who is in New York. And having covered many trials myself, Maggie, you have many hours standing outside the courtroom. Let's hope it doesn't rain.
(LAUGHTER)
LAKE: That's right.
One year after the Gulf of Mexico oil spill. BP, the British Petroleum, Beyond Petroleum, whatever you want to call it, a different company, when we come back we'll look at the changes that have been forced on the company and the problems BP still faces. In a moment, good evening.
(COMMERCIAL BREAK)
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
I need to update you. A Western photojournalist has been killed in the Libyan city of Misrata. He's Tim Hetherington and apparently he was caught in the crossfire of fierce battles that are raging for control of the city. The agency that represented him said that he was hit by a rocket propelled grenade. Another journalist was seriously wounded.
The Nigerian president, Goodluck Jonathan, is promising a new dawn for the divided country, as authorities work to bring post-election violence under control. Riots erupted on Sunday after Mr. Jonathan was voted into another term. The Red Cross says the violence has displaced more than 40,000 people.
This video of seven men who are apparently being held hostage has authorities in several countries looking for answers. It was uploaded onto YouTube and it's been confirmed that they are Estonian men who were kidnapped during a cycling vacation in Lebanon.
Wildfires raging across the U.S. state of Texas show no sign of abating due to heavy winds and dry weather. The flames have already scorched more than 560,000 hectares and destroyed over 170 homes in the past two weeks.
Vladimir Putin says Russia will not interfere in the deal between BP and two Russian companies. BP's oligarch partners in TNK-BP are blocking a deal with Russia's -- Russia's Rosneft and they say it violates their right of first refusal to do deals in Russia with BP.
Now, Prime Minister Putin says the dispute should be settled in the courts.
Since the deadly and costly Gulf of Mexico oil spill, BP is a very different entity. But as the Rosneft debacle shows, BP still has the capacity to slip over.
Now one year on, Jim Boulden looks at what's changed at BP.
(BEGIN VIDEOTAPE)
JIM BOULDEN, CNN CORRESPONDENT (voice-over): At daybreak, April 21, 2010, it became clear just how deadly the explosion was on the Deepwater Horizon oil rig the night before -- 11 workers killed, the well had broken. Oil was spewing unabated into the Gulf of Mexico.
Weeks went by. The well could not be shut off. Cleanup would cost billions. The Gulf and BP were changed forever. IAIN ARMSTRONG, BREWIN DOLPHIN: I think it's very difficult to change a company like BP within 12 months. I think, obviously, the personnel have changed, the attitude toward safety has definitely changed. The -- the asset base has definitely changed.
BOULDEN: Here's a breakdown of those three changes. BP and its then CEO, Tony Hayward, were under attack by fishermen, environmentalists and the White House.
DAVID MARGULIES, CRISIS PREVENTION & MANAGEMENT EXPERT: One of the big mistakes BP made, and many companies make, is they put one person in charge of everything.
BOB DUDLEY, CEO, BP: Well, there's no question we're going to learn a lot from this accident in the Gulf Coast.
BOULDEN: By July, Heyward was on the way out. Bob Dudley was elevated to CEO later that year. Dudley grew up in the Gulf region. A new CEO helped take off some of the heat coming from Capitol Hill and the White House.
What about safety and risk management?
In a video just launched on BP's Web site, Dudley details how BP has restructured.
DUDLEY: Looking to the future, it also explains the changes we're making in BP today, to put safety and risk management at the heart of everything we do.
BOULDEN: Another big change -- BP, the oil giant, is just a bit smaller, as it sells $30 billion worth of assets as part of putting $41 billion aside to pay for the Gulf disaster. BP does have plans, of course, to grow again.
ARMSTRONG: It's very, very slow growth. And it's deliberately very, very slow great, because they don't want to get caught in a sort of position where they're saying, look, you're starting to cut corners again.
They have to be the ultimate in terms of caution, I think, going forward.
BOULDEN: For long-term growth, BP is refocusing in certain areas. Deepwater deals were struck off China, Australia and Brazil, onshore deals in Indonesia and India.
And in early January of this year, an announcement that BP would swap equity with Russia's largest state-controlled energy firm, Rosneft, to explore the deep waters of the Russian Arctic -- the first private oil company to swap shares with a state-controlled oil company.
But if Dudley hoped this would help BP move on from the Gulf disaster, it hasn't. BP is now mired in a legal battle with its Russian partners in TNK-BP, who say they have a deal to be BP's sole Russian partner. While this moves through the courts, the Rosneft plan is on hold and opens BP up to claims it's moving from crisis to crisis.
(on camera): And one year on, it's still not clear exactly how many barrels of oil spilled into the Gulf of Mexico, and, therefore, how large a fine the U.S. government will impose on BP and its partners in that stricken well.
Jim Boulden, CNN, London.
(END VIDEO TAPE)
QUEST: So, the oil industry has learned lessons. BP has learned lessons. But it wasn't only the oil companies that felt the public's anger over the spill. U.S. politicians drew criticism from all corners for how they handled the response.
Now, Brianna Keilar asks if the U.S. Congress itself learned any lessons.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: We're estimating a thousand barrels per day.
UNIDENTIFIED MALE: Five thousand barrels a day.
UNIDENTIFIED FEMALE: Twelve thousand to 19,000 barrels per day.
UNIDENTIFIED FEMALE: Forty to 50,000 barrels a day.
BRIANNA KEILAR, CNN CONGRESSIONAL CORRESPONDENT (voice-over): As oil spill estimates ballooned, so did Americans' concerns. May 20th -- one month after the disaster began.
UNIDENTIFIED FEMALE: With this new video, which you see there on the right.
KEILAR: CNN started showing live pictures of the oil gushing to the Gulf. BP had finally answered Democrats' demands to show the public what they were seeing. And Massachusetts Congressman Ed Markey put the so- called spill cam on-line.
(on camera): You put this on your committee Web site.
REP. EDWARD MARKEY (D), MASSACHUSETTS: That's right.
KEILAR: The Web site crashed, didn't it?
So many people were looking at it.
MARKEY: This was like an overnight sensation. There ultimately were hundreds of thousands -- millions of people who became obsessed with -- fascinated by what they were seeing.
KEILAR (voice-over): Now, one year later, what about making sure this never happens again?
(on camera): What has Congress done?
MARKEY: Congress has not passed any legislation yet to respond to the lessons which we have learned from that spill.
KEILAR (voice-over): Markey blames Republican senators who opposed a bill the House passed last Congress.
(on camera): It's not just Republicans, it's also Democrats who are running counter to what you say needs to be done.
MARKEY: Well, again, we had a majority of the votes in the Senate, but you need more than 51 in the Senate. You need 60 votes in the Senate.
KEILAR: But you didn't even have all the Democratic votes.
MARKEY: No, we didn't have all Democrats. But it's a very small minority of Democrats, plus just about every Republican, just to get the mix correct.
KEILAR (voice-over): And Markey lost another battle in February, when the Obama administration once again allowed deep water drilling, with the support of Republicans and some Gulf state Democrats, who argued that drilling means jobs.
(on camera): What do you say to the president?
MARKEY: It's important for the Obama administration to go only so far and not to be pushed into a situation where they, once again, are invoking the law of unintended consequences.
KEILAR: To play devil's advocate, that's pretty soft language for someone who looked at BP executives and demanded they apologize for lying.
You know, isn't that being soft on the administration?
MARKEY: No, I am saying that they have to be very careful.
(END VIDEOTAPE)
QUEST: Brianna Keilar reporting there. There will be a Profitable Moment on BP at the end of this program.
The Dow Jones is trading. And this is the recovery that, perhaps, we hadn't seen after the sharp falls earlier in the week, up 179 points, nearly 1.5 percent, at 12446.
And one of the reasons, of course, has been the revenue and the numbers that we saw from Intel. Intel's results gave the market a strong boost, as, indeed, have numerous tech stocks today.
Now, 56 percent of Intel's revenue -- indeed, and the same can be said of other companies -- comes from the Asia-Pacific region, excluding Japan. Dell, which is the world's second largest PC maker, is adapting its strategy to tap into those emerging markets.
And I spoke to Dell's founder and chief exec, Michael Dell, about the explosive growth that's being seen in emerging markets like China.
(BEGIN VIDEOTAPE)
MICHAEL DELL, CEO AND FOUNDER, DELL: We've had great growth and success in these emerging countries. So you take China. It's a $5 billion business for Dell, you know, on its way to $10 billion. India, you know, we had 60 some odd percent growth, you know, last year there. You know, the number one commercial provider. Brazil, a couple of billion dollar business for us, growing quite fast.
The front lines of what they're doing very much play to the origins of Dell. And now we're taking those customers into this kind of virtualization and cloud era.
So I think we're extremely well-positioned in emerging countries. It's been a big source of our growth.
QUEST: But are you an American/Western company that happens to do business in China or, at some point, are you going to have to shift the company to think like doing business in China?
I think there's a difference.
DELL: We -- we see a difference. If you like inside our activities there, we're developing products there locally. We're doing research there. We're doing manufacturing there, obviously, sales and sourcing. And we have indigenous teams that we've developed there.
So our businesses there are pretty nicely developed and, you know, I think we're -- we're -- we're certainly a global company and -- and we're not thought of as a -- as -- as a homegrown company there, because -- because we, you know, we're -- we're global. But we have strong local roots there that -- that we built and that -- those businesses continue to thrive for us.
QUEST: As we take a look at the U.S. economy -- and we need to just talk about the U.S. momentarily. And I mean the current slag -- slashing growth of recovery that has been seen in developed markets -- the EU, the U.S. -- they are not performing at their peak full speed and they're unlikely to do so for some time. Economies are still not in good shape.
DELL: What I'm hearing from our commercial customers is they're kind of using this as an opportunity to retool their infrastructure, because they know that, yes, there's challenges in the economy this year, maybe next year, or whatever. But two or three years from now, you know, they're -- they're looking forward.
And so I think IT, you know, if you want to be productive, you know, it's not -- it's not calculators and abacuses, you know, it's IT.
And so we're in the business of productivity. Business is good. I think you'll see our earnings grow even in periods where the economy is not so good.
(END VIDEO TAPE)
QUEST: The chief exec and the founder of Dell Computers, Michael Dell.
Back in a moment.
(COMMERCIAL BREAK)
QUEST: Tonight, we break the mold, profiling people across the world who march to a different drumbeat.
For instance, the cyber architect, James Law, who's leading the charge for intelligent buildings, what he calls cybertecture.
He told us why there's an urgent need for cities to think creatively.
(BEGIN VIDEOTAPE)
JAMES LAW, ARCHITECT, CYBERTECTURE: You've got to break the mold. You've got to think about buildings differently. You've got to think about designing differently. You've got to think about using materials differently.
This is the result of our 20th century's effort to develop the world - - millions of people traversing at one corner with each other every day in an extremely dense and overpopulated kind of development. The world cannot be designed just like this. We need to have cities planned as spaces for people to breathe, buildings that are able to bring nature back inside the city, so that people can really readdress the kind of lost balance that they no longer have when they're living in a city like this.
The need to be in an urbanized area has been driven a lot by the global kind of economic setup -- to have a job, to have a decent life, to have an education -- needs that you have to be in an urbanized area.
And that has put a great amount of pressure in how we can design and cater for that kind of increasing load for energy and resources for such a densely populated human race.
We know that buildings are getting more and more complex. They're using more and more technology. And they're creating the new spaces of the 21st century.
There is an urgent need now to be different, to create things which are new, to deal with the world's problems, to deal with the world's challenges.
I believe that the buildings will become really rather intelligent devices that will help us to live, work and play in a very, very powerful way. And they will all embody new forms of design and new materials of design that we never expected before in a traditional building.
And right at the heart of what I believe in, in creativity, is the need to become an inventor. We are looking to people to deliver the solutions of the future. That is what I believe in. And I think it's extremely important in the 21st century.
(END VIDEO TAPE)
QUEST: Some fascinating thoughts about what life in cities means, as we break the mold, which we will be doing each Wednesday.
The weather forecast now.
Guillermo is at the World Weather Center.
And, look, it's lovely weather at the moment -- Guillermo, there...
GUILLERMO ARDUINO, CNN METEOROLOGIST: You're a lucky chap.
QUEST: Yes, well, hang on, hang on. Now don't get yourself all -- all unnecessary. The only question we need to know is the 29th.
ARDUINO: We think it's going to be fantastic. It's a little bit too early to say.
QUEST: Ah.
ARDUINO: Too early to say.
QUEST: So what have you done -- so what have you done for me lately?
ARDUINO: The Brits are unpredictable, even the weather. So, you know, we have to wait. But is looks fine. The -- the trend is very nice. And as I said at the beginning, you're a lucky chap. The weather is wonderful. We have high pressure here.
My friends in Spain -- I have several friends in Spain -- are telling me it's nasty. It's awful. They even sent a couple of pictures and -- saying that there are some clouds there. Actually, it's ranging in the north near San Sebastian. What a beautiful place. I love that city.
So this low is going to come here. It's going to cause some problems. In the meantime, nice. And Russia still very, very cold.
So you see in here that Spain, with the arrival of this low, and Portugal, are going to see bad weather. Well, Gibraltar and also parts of Morocco, as well, severe wind gusts and large hail possibly. So at airports, you know, if you're going there Thursday into Friday in the morning, come up with patience. That's the one thing we can do.
Frankfurt looking fine; Munich fine; Copenhagen, Zurich; Vienna looking fine. So we don't have many problems at those airports.
London, let me emphasize it once again, Heathrow looking fine; Paris, Amsterdam; Dublin; Brussels. Fantastic.
In Spain is where the problems are. Madrid so far, for the time being, and some windy conditions in Barcelona.
All right, so I told you that in the east is where the cold weather is. It's slipping all the way into Istanbul, but especially we feel it in the extreme north. It's a matter of time. Look, Paris wonderful at 23 for Thursday. London, 24 degrees. Look at Germany. Look at Berlin and even to the west, where we have nice conditions, 22 in Vienna, not only -- always do we see something like that.
But in the States, the severe weather continues. Look at this, tornadoes. And I'm going to show you one report in particular here coming from Illinois in Girard. We had a tornado, also wind. Remember, we have big airports here in the United States in those areas. We still see snow in Michigan. And we have some severe weather in the south. It seems that it's fizzling out a little bit. But this is, again, the time of the year when we see the bad weather .
So damaging winds, complications at airports, you know, delays. San Fran with a ground stop right now. Boston, New York, this is real time -- Fort Lauderdale, New York, White Plains, Detroit. You see all in the East Coast and into the Midwest, Richard, is where the problems are.
So the bad weather stays in the States.
QUEST: Good. Keep...
ARDUINO: East Coast and into the Midwest, Richard, is where the problems are.
So the bad weather stays in the States.
QUEST: Good. Keep -- keep -- keep it over there...
ARDUINO: Thank you.
QUEST: -- at least until April the 30th.
Guillermo Arduino at the World Weather Center.
ARDUINO: Thank you.
QUEST: Put some money in the -- in the meter and we'll find out what the forecast is, Guillermo.
Now, in the UK, there is bunting and coronation chicken at the ready. Fans are getting ready to celebrate. And it wouldn't be a wedding -- it wouldn't be a royal wedding without a street party.
We'll have that after the break.
(COMMERCIAL BREAK)
QUEST: A street party -- that's the most important thing when you have a major national event in Britain. And the royal wedding has encouraged the revival of a great British tradition, the street party with its sausage rolls, its trifle and its, of course, fresh lemonade. There have been around 4,000 street party applications across the UK for the wedding day.
Now, many councils are waiving the usual fees for licenses and they're closing the roads. It's going to be a right royal jamboree. And, in fact, insurance companies are also offering special deals for public liability coverage.
So, as you can see, street parties help you get into the mood. And there will be plenty of them in the UK.
Tour companies are hoping to grab a piece of the royal hoopla, too.
Emily Rueben joins some tour parties -- those who are hoping for a sandwich and a brush with royalty.
(BEGIN VIDEO TAPE)
UNIDENTIFIED FEMALE: In this case...
EMILY RUEBEN, CNN CORRESPONDENT (voice-over): The tourists, isms, can't get enough of the royal wedding -- walking tours around London, coach tours to Kate Middleton's home...
UNIDENTIFIED FEMALE: This is where she was baptized.
RUEBEN: Even London's most exclusive hotels are getting in on the act.
But not everyone, it seems, is your average sightseer.
UNIDENTIFIED FEMALE: Here we are. Here's The Old Boot Inn.
RUEBEN: Take this coach tour of Kate Middleton County, promising an inside trip to where the future princess will be (INAUDIBLE).
UNIDENTIFIED FEMALE: Here we are in front of -- RUEBEN: Every single occupant is from the media.
BETTINA MADLENER, AUSTRIAN NATIONAL BROADCASTING CORPORATION: All journalists here today are a little bit disappointed. We really thought there would be some tourists, some made fans, some -- some frenzy about it or some -- somebody who really wants -- wants to know more about Kate Middleton. But it actually turns out, this is just kind of a -- a tool for journalists. It's -- it's a bit of a money grabbing thing, as well.
RUEBEN: For the $56 price tag, you get a glimpse of the house Kate grew up in, her schools and the church where she was christened. There's also a stop at what's said to be the Middleton's local pub.
CHARMAIN GRIFFITHS, TOUR GUIDE, MORTONS: It's not flashy and it's running a business to make money. And if it brings in ongoing business, well, it's less from the price of advertising, isn't it?
UNIDENTIFIED FEMALE: So, everyone get on the side of...
RUEBEN: We did find some royal watchers on this Celebrity Planet Walking Tour of William and Kate's London.
(on camera): The organizers of this tour admitted to me that they set it up to respond to what they called the media madness after the royal wedding was announced. Initially, it was 100 percent press and journalists. Today, we're one of just three crews. And everyone else is a tourist here to enjoy the walk.
UNIDENTIFIED FEMALE: It's really interesting, because in Korea, we don't have royalty anymore. So to experience this, like how the London -- or like the England is celebrating this event, it's just really amazing.
REUBEN: You've come all the way from New Zealand just for the royal wedding?
UNIDENTIFIED FEMALE: Yes, that's right.
REUBEN: Why?
UNIDENTIFIED FEMALE: Well, because I'm a royalist, I suppose. And I came like 30 years ago for Prince Charles' wedding.
UNIDENTIFIED FEMALE: Welcome to the Mandarin Orient of London.
REUBEN (voice-over): We did manage to find one tour that had not a single journalist on it -- a five day program at the exclusive Mandarin Oriental in London. Perhaps that's down to the price tag, from $18,000 a person, you get to meet a member of the royal family -- they're not saying who -- and a great spot near Buckingham Palace to watch the wedding.
MICHAEL BENTLEY, MANDARIN ORIENTAL HOTEL: And it's going to be the most glorious, glorious pageant overlooking St. James' Park. The daffodils will still be out and there will be huge crowds and it will affect everybody. It's a happy occasion.
REUBEN (on camera): So this will be royal pomp and ceremony at its very height?
BENTLEY: Yes. This will be royal pomp and ceremony at its very, very best.
REUBEN (voice-over): There are still a few places left. If you have a spare $18,000, you know where to come.
Emily Reuben, CNN, London.
(END VIDEO TAPE)
QUEST: Eighteen thousand dollars when you can come along to my street party for free.
Now, the royals aren't the only wedding presents we're interested in. Planning the big day is a huge event for mere civilians like you and me.
So why don't you send me your pictures -- for richer, for poorer -- of your wedding day to -- send it to quest@CNN.com. We'll show them next week.
A Profitable Moment is after the sausage roll.
(COMMERCIAL BREAK)
QUEST: Tonight's Profitable Moment.
There is plenty of blame to go around in the BP oil disaster -- as the various reports point out, the shortcomings of BP, its partners, the regulatory systems, all of which failed. Accidents don't happen by, well, accident. And BP's constantly reminding us lessons have been learned.
But we must question how far the other players in the I need -- those that provide the equipment, the manpower, the wherewithal, the subcontractors, the regulators -- whether that culture change has shifted throughout the industry.
Make no mistake about it, we need deep sea oil exploitation, but we need it to be done safely. And it is not yet clear that that we can do.
But that is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"PIERS MORGAN TONIGHT" is ahead after the headlines.
END
