Libya's SWF to Invest in BP?

Libya's top oil executive believes his country's sovereign wealth fund, the Libyan Investment Authority (LIA), should invest in BP. The IndependentUK reported:

"BP is interesting now with the price lower by half and I still have trust in BP. I will recommend it to the LIA," said Mr Shokri Ghanem, Chairman of Libya's National Oil Company. "I think that BP shares are good value for bargain hunters."

BP has large interests in Libya and is known to have a strong relationship with officials in the country.

Shokri signed the deal with BP's Tony Hayward as PM Tony Blair looked on.



That 2007 agreement helped release the Lockerbie Pan Am Flight 103 bomber. Col. Gadhafi's son spoke in front of a television camera, telling the freed bomber:

"It is to be said for the first time, you were present on the table in all commercial, oil and gas agreements that we supervised in that period.

You were on the table in all British interests when it came to Libya, and I personally supervised this matter."

Libya's British oil deals helped free a convicted terrorist. Proceeds from that oil could free a serial safety abuser from financial handcuffs. Will Senator John McCain tweet on this?

Update: Four U.S. Senators noted the pattern. BP admitted they lobbied for the bomber's release.

BP's Entrix

WaPo reported the Obama administration's collaboration with BP on assessing environmental damage from the Deepwater Horizon oil catastrophe. Their article stated:

BP spokeswoman Anne Kolton wrote in an e-mail that the company is working with state and federal officials "conducting joint sampling to gather information about the condition of the environment before the spill and to establish the environmental impacts of the spill and extent of restoration that is required."

In most cases, BP is represented by employees of Entrix, an environmental consulting firm it contacted within hours of the Deepwater Horizon explosion.

Entrix experienced sea changes after April 20. It was bought out by an Australian firm, Cardno Limited. Seller Riverside Capital owned 58% of Entrix, while employees owned 42%. The deal was announced June 10, but was effective June 1.

Highlights from Cardno's investor presentation on its acquisition of Entrix and ERI include:

--Entrix and ERI's clients include BP, Chevron, ExxonMobil, ConocoPhillips, TransCanada, PG&E, Dow Chemical, U.S. Army Corps of Engineers, FEMA and the U.S. State Department.

--Entrix is also regarded as a leader in the assessment of the environmental and economic impact of oil spills and the associated restoration, rehabilitation and monitoring of impacted sites. It has standing response management contracts with the world's leading oil producers.

--ERI is an environmental soil and groundwater remediation firm focused on the petro-chemical market in the U.S.

Cardno dialed into the sweet spot of BP's oil spew. My questions are:

1. Who is Entrix officially working for?

2. Did Entrix have a response management contract with BP? What did it specify?

3. Does Entrix have an incentive to refer remediation work to ERI, its sister division within Cardno?

On July 1 Cardno announced a trading halt to its stock, due to capital raising. Private equity underwriters (PEU's) fancy Australian companies.

Cardno's vision is to become a World Leader in infrastructure services. Most PEU's have an infrastructure division. They also have billions of capital to invest.

Will any PIPE their way into Cardno? The answer will come soon, as the trading halt is expected to end July 5.

Carlyle's Rubenstein Growls AAR

Carlyle Group co-founder David Rubenstein spoke of his global effort to emancipate greenbacks at an emerging markets conference. His comments from that talk include:

Africa:

"I am very bullish on the prospects for Africa. Nothing compares with Africa in terms of economic growth as a percentage over the next decade, [partly because] it is starting from a low base."

Asia:

Private equity underwriters (PEU's) will make more money in Asia than in any other region, partly because it can absorb the most capital of emerging markets, Rubenstein added. He said: "In terms of the total amount of money to be made [by private equity firms], China is overwhelming."

Russia:

Investment in Russia will prove "more complicated" for private equity firms, according to Rubenstein. He said: "We opened an operation in Russia twice and didn't make it work. Western firms have not yet extracted as much in profits from Russia as from other large emerging markets."

The size of Russia's economy and the government's desire to attract private equity firms are likely to make it more appealing in the future, Rubenstein added. He said: "It will be very appealing, but a little more complicated."

What do these areas have in common? Corrupt governments with a history of bribes. The Carlyle Group shares such a history with public pension funds.

How might the buying and selling of influence further global commerce, but especially PEU profits? Corporate raiders aim to find out.

BP's Tiber Field & William Reilly

FT reported:

Less than a year ago, Deepwater Horizon seemed to have set BP on a very different course. Last summer, the group drilled the deepest well ever developed for a commercial operation and struck oil. On September 2, it announced it had discovered a “giant” field, christened Tiber, which was likely to hold more than 500 million barrels of recoverable oil. BP’s shares rose by 4 per cent in a single day, a rare event for a company of BP’s size. Moreover, it seemed that the initial reaction was, if anything, understated. Tiber was a harbinger of a new dawn for the company, in which production from the deep water of the Gulf would drive global growth.

BP's partners in Tiber include ConocoPhillips and Brazil's Petrobras. Oil Spew Commission co-chair William Reilly controls over $2 million in stock in ConocoPhillips. That conflict doesn't go away during Reilly's temporary leave from ConocoPhillip's Board.

The FT piece also omitted Jamie Gorelick's role as BP attorney and BPAmerica External Advisory Council member. I'm happy to fill in the gaps.

Carlyle Group's Cadmium Jewelry for Kids

The AP reported:

Federal regulators said Wednesday they have found high levels of the toxic metal cadmium in trinkets that were distributed for free to children at some doctor and dentist offices over the past five years.The news came as the Consumer Product Safety Commission announced a recall of nearly 70,000 charm bracelets and rings.

Companies foisting toxic toys on children include Disney, Best Friends, Claire's. McDonald's and Walmart. Add The Carlyle Group's Oriental Trading to the list.

A spokeswoman for the ring importer identified by the CPSC in Wednesday's recall — Fun Express Oriental Trading Company, of Omaha, Neb. — did not return calls or and e-mail seeking comment. The Carlyle Group, a private investment firm that owns Oriental Trading Company, referred a request for comment to the company.

Oddly, Oriental Trading's website cites the recall of a Football Adjustable Ring. It reads like a BP press release, loaded with risk management language:

We were recently notified that a supplier issued a voluntary recall of our product 42/4359 Football Adjustable Ring because of the presence of cadmium in the metal substrate. This product has not been sold by Oriental Trading since last year and is no longer in stock.

The Football Adjustable Rings passed rigorous testing prior to distribution and we have no information to indicate that the item may present a hazard to children, and we firmly believe that the product is in compliance with all applicable safety requirements. However, our top priority is product safety and, as a precaution, we are voluntarily recalling the item.

Cadmium children's products originate in China, a favored part of the world for The Carlyle Group. The rings rated a 5 out of 5 on overall rating, price and quality. Customer reviews stated:

Great Quality--"I bought these for my son's 11th birthday as party favors. I love that they are metal and look nice. The kids all thought they were cool! Even the girls."

They were a hit!!--"The kids loved them!!"

Amazing!--"I have two nephews that play football. I am constantly ordering something new to support their teams. We are the Little Bears and the paw pride items such as tattoos, pencils and bracelets are fantastic!! I also purchased razzle dazzle beads in our team colors along with paw print charms. They were an instant hit! Keep these GREAT items coming!"

Carlyle affiliates and partners traded with deadly results before. They will again. Rest assured, we won't hear a peep. They have a good name to keep.

Update: Oriental Trading missed the grace period on its second lien debt and is in default. Carlyle looks to cram down lenders. Beware if the PEU shows up with football rings.

PEU's Great Cash In

Bloomberg noted the plethora of private equity underwriters (PEU's) conducting IPO's. Big names, from The Carlyle Group to KKR, are ringing the register on affiliates. The article stated:

HCA, the hospital chain bought four years ago in a $33 billion LBO led by KKR & Co. and Boston-based Bain Capital LLC, filed with the SEC in May to sell $4.6 billion of shares.

The hospital operator will get about 54 percent of the proceeds, which will be used to pay back some of its $25.7 billion in debt. HCA’s owners, who used borrowed money for more than 80 percent of the purchase price, will get the rest.

PEU owners will garner $2.1 billion from HCA's IPO. The article didn't cite previous bleeding of HCA via special dividends/distributions. SEC filings show HCA paid investors $1.75 billion and $500 million in 2010. Total proceeds to HCA's owners in 2010 will be $4.35 billion. No wonder PEU's salivate over hospitals.

PEU to Head WhiteHall Reform

Lord John Browne of Madingley will oversee a 25% cut in British government spending as "lead non-executive director." Browne is the ex-CEO of BP, where similar budget cuts resulted in the 2005 Texas City Refinery explosion (which killed 15 workers) and a 2006 leak in BP's Alaska oil pipeline.

Currently, Browne is a private equity underwriter (PEU) His working title is Managing Director for The Carlyle Group's joint venture energy partner, Riverstone Holdings. Browne's British PEU appointment follows three American high profile commission chairs:

1. Erskine Bowles - Deficit Commission, PEU with Carousel Capital

2. William Reilly - Oil Spew Commission, PEU with TPG

3. Fred Malek - Virginia's Government Reform Commission, PEU with Thayer Capital

Lord Browne, 62, whose new role is unpaid, said:

'This is a role within government but also independent of it. Its purpose is to assist in the delivery of policy using relevant experience from business.

Browne's fuzzy role is accentuated by a gray-shaded title, lead non-executive director. Lord Browne added:

'There is a great need for the best of the business community to be involved during these challenging times for the UK.'

FT reported:

Some in Whitehall could take umbrage at being advised on cost cutting by a man whose lavish private office at BP included furniture designed by Viscount Linley.

Echoes of John Thain and his $35,000 toilet cabinet. FT added:

Executives close to Lord Browne claimed Mr Cameron delayed naming him as the government's "lead nonexecutive director" until after last weekend's G20 summit in Toronto to avoid upsetting US president Barack Obama.

Downing Street denied the claims, but Lord Browne's appointment - approved by Mr Cameron several weeks ago - has been on hold for weeks while his former company has struggled to contain the oil spill in the Gulf of -Mexico.

Francis Maude, Cabinet Office minister, said the former BP chief would advise the government on recruiting senior business figures to serve as non-executive directors on beefed-up boards, overseeing each Whitehall department.

Expect job cuts to fund the furniture budget and rich lifestyles of Browne's friends. They may serve for "free," but PEU's have divisions seeking profitable government business.

As for Browne's history with cost cutting, peruse his Texas City refinery explosion deposition. Competence is not a requirement, only club membership, which Browne has in spades.

The irony of personally opulent Lord Browne cutting jobs for small people is nearly as rich as his work for the "Lib-Con" coalition. It smells like PEU.