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Stories have been circulating over the past few days that BP may be looking at its bankruptcy options as the only way out of its self-made travesty in the Gulf of Mexico. But, in the past hour, according to an interview with top oil and gas consultant Matt Simmons, just posted on Fortune Magazine's website, it now appears that the possibility that BP will file bankruptcy very soon is quite real.

The interview, linked in the blockquote, below, is quite interesting, since it covers quite a bit more than just BP, but it's still a very quick read.

In Nin-Hai Tseng's interview, Simmons praises the Obama administration for forcing BP CEO Tony Hayward (three weeks ago) to commit BP, in writing, to paying for every dollar of the cleanup. Of course, if BP does file for bankruptcy, the reality is that may never happen and U.S. taxpayers may be stuck footing at least a significant portion of the bill.

H/T to Zero Hedge on this, where they uncharacteristically caution that this is all just rumor, while noting that BP's stock is tanking, and reminding us that there's another rumor floating around that BP may have already hired a bankruptcy lawyer, in: "BP ADRs Plunging As Two Rumors Of Imminent Bankruptcy Hit Market."

Meanwhile, here's the link and a snippet from the Fortune Magazine interview...

The Gulf Coast oil spill's Dr. Doom
Fortune Magazine
Interview by Nin-Hai Tseng, reporterJune 9, 2010: 1:31 PM ET

FORTUNE -- As an oil and gas industry insider, Matt Simmons speaks with a bold voice and makes even bolder predictions. His 2005 book, Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy, which argued that Saudi Arabia's oil supplies are way more limited than most people think, raised his profile as an authority on the industry...


...Simmons is deeply connected and has been pretty much right on in the past: When oil was $58 a barrel the year Twilight was released, Simmons predicted prices would be at or above $100 within a few years. By 2008, when Fortune profiled Simmons, the price of crude had hit $147 a barrel...


...Simmons has been warning that the scale of the spill is much bigger and that there's a larger leak several miles away...


What do you think is in store for the future of BP?

They have about a month before they declare Chapter 11. They're going to run out of cash from lawsuits, cleanup and other expenses. One really smart thing that Obama did was about three weeks ago he forced BP CEO Tony Hayward to put in writing that BP would pay for every dollar of the cleanup. But there isn't enough money in the world to clean up the Gulf of Mexico. Once BP realizes the extent of this my guess is that they'll panic and go into Chapter 11...


Originally posted to on Wed Jun 09, 2010 at 11:54 AM PDT.

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