BP's $20bn Oil Disaster Fund Nearly Drained

BP's $20bn (£13bn) Gulf of Mexico oil spill compensation fund has almost run out after provision for costs so far climbed by $1.4bn (£910m) in the second quarter.

The British oil giant now has just $300m (£200m) left in the fund, and the deadline to file a business economic loss claim among Gulf coast businesses - which make up the bulk of claims - is not until April 2014.

BP has said claims beyond what the fund can pay will be taken straight off future profits.

The firm revealed the extra cost in its second quarter results, which missed forecasts due to the lagging effect of tax in Russia where the price of Urals crude was weaker.

It also said it was due to the tax effects of a stronger dollar on a basket of currencies.

Adjusted net profit for the three months was $2.712bn (£1.35bn) compared with expectations of $3.410bn and $3.6bn (£2.5bn) a year ago.

The Deepwater Horizon explosion caused environmental damage

Of the extra $1.4bn of spill costs - which come on top of a $500m (£300m) cost in the first half - some $900m is for extra claims, while about $500m is for the administration costs of the claims administrator.

It also faces a resumption of its trial on civil charges in September.

BP remains locked in a legal battle over the compensation payouts, some of which it claims are spurious, and has increased its overall provision for the spill to $42.4bn (£27.7bn) from $42.2bn.

It set up a hotline for whistleblowers to give tip-offs about fraudulent claims.

Eleven workers died after the explosion on board the floating oil rig

The oil giant alleges that the handling of the settlement has sparked a "feeding frenzy" and is allowing businesses from the area to claim for "non-existent, artificially calculated losses".

The blow-out of the Deepwater Horizon well off the Louisiana coast in 2010 claimed 11 lives and damaged fishing, tourism and wildlife habitats, forcing BP to agree a multi-billion compensation deal in April 2012.

But it has warned in court filings that it will be "irreparably harmed" unless the compensation system is reformed, saying the cash drain could put its dividend at risk and make it vulnerable to a takeover.

However, chief executive Bob Dudley said the latest results showed there had a been a strong underlying pre-tax performance from its businesses, with growth in production from new projects and good progress in exploration.

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Deloitte Found Guilty Over MG Rover Demise

Accountancy giant Deloitte faces a fine of up to £20m after being found guilty of "persistent" failings on professional standards in its dealings with collapsed car manufacturer MG Rover.

Accountancy watchdog the Financial Reporting Council (FRC) ruled the "Big Four" accountant failed to spot conflicts of interest in its advice to MG Rover and directors who bought the company before its collapse.

West Midlands car maker MG Rover collapsed into administration in 2005 with debts of £1.4bn and more than 6,000 job losses.

It had been bought by directors known as the Phoenix Four for a token £10 five years earlier.

The so-called Phoenix Four were banned from business after the collapse

Although the exact penalty is yet to be decided, Deloitte is understood to be seeking a penalty of around the £1m figure.

An FRC tribunal found Deloitte and former partner Maghsoud Einollahi showed a "persistent and deliberate disregard of the fundamental principles" of the accountancy code of ethics.

It said Deloitte "failed to consider the public interest" in advising the Phoenix Four, and did not make it clear who was its client. The tribunal ruled against Deloitte on all 13 allegations.

Deloitte said it disagreed with the ruling, warning it could have implications for the wider accountancy profession. It could face an unlimited fine.

Former workers outside the closed MG Rover plant in Longbridge

Paul George, executive director for conduct at the FRC, said the outcome "sends a strong clear reminder to all accountants and accountancy firms that they have a responsibility to act in the public interest in the work they undertake".

A spokesman for Deloitte said it was "surprised and very disappointed" with the outcome.

He said: "Deloitte's advice, which itself was not criticised, helped to generate over £650m of value for the MG Rover Group, keeping the company alive for five years longer than might have been the case and securing 5,000 jobs in the West Midlands during this period.

"We take our client and public interest responsibilities extremely seriously and are proud of the value we helped create for the MG Rover Group."

A ruling on costs and a possible fine is expected in the next few days.

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Dreamliner Grounding 'Cost Carrier ANA £53m'

Japan's All Nippon Airways (ANA) has said the grounding of its Boeing Dreamliner fleet has cost it 8bn yen (£53m).

The announcement comes after the carrier made a second-quarter loss of 6.6bn yen (£44m).

It reversed a small year-earlier profit, despite a 4.4% rise in revenue to 358.3bn yen (£2.38bn).

"The primary reason for the increase in operating expenses was a rise in fuel costs due to the weakening of the yen," it said in a statement.

"Operating revenues were also held back by the suspension of Boeing 787 services for part of the period."

In early January a Japan Airlines (JAL) plane caught fire in Boston

ANA and domestic rival Japan Airlines, which reports its quarterly results Wednesday, were sideswiped by the grounding of Boeing's new aircraft that began in January.

After a long-running probe the planes were allowed to fly again in June.

The carriers at the time operated about half the Dreamliners in service and had to cancel hundreds of flights in the wake of the crisis, which was caused by problems with the plane's lithium battery.

The carrier and Japan Airlines have said they will seek compensation from Boeing having lost a combined total of more than 22.5bn yen (£149m) in revenue.

The fire at Heathrow was suspected to have been caused by a beacon battery

"The impact of the problems was bigger than originally expected," Kei Yamamura, an aviation analyst with SMBC Friend Securities, said.

"But this factor will fade toward the end of the fiscal year as long as these issues don't come up again."

Although issues related to the auxiliary power supply lithium battery appear to have been resolved, emergency locator transmitters (ELT) used by Boeing now appear to be under scrutiny.

A fuselage fire on an Ethiopian Airways 787 at Heathrow airport on July 12 was pinpointed to the ELT manufactured by Honeywell.

The US Federal Aviation Administration advised on the emergency beacon wiring being checked.

Boeing has subsequently told airlines up to 1,200 aircraft across a range of models have the ELTs fitted.

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Court Challenge Against 'Bedroom Tax' Fails

The High Court has dismissed claims the Government's so-called "bedroom tax" unlawfully discriminates against disabled people.

Campaigners had been fighting to block the controversial housing benefit regulations that came into force on April 1.

Despite losing, they welcomed court criticism that the Government had not done enough to provide for disabled children.

Opponents argue the new rules penalise families with children who cannot share rooms because of a disability.

Judges noted that the coalition had been aware since May last year that the law must be changed but had failed to act in time.

Lord Justice Laws, sitting with Mr Justice Cranston, said the current state of affairs "cannot be allowed to continue".

Lawyers acting for disabled people said the ruling meant the Government now had to act "very speedily" to address the problem.

Under the coalition's clampdown, tenants considered to be under-occupying their accommodation have their housing benefit cut.

Tenants with one spare room have a reduction of 14% and those with two or more spare lose 25% of their cash.

Human rights lawyers argue that families who do not move into smaller homes face building up arrears and will be kicked out anyway.

Ten cases were brought before London's High Court to illustrate the serious impact of the regulations on disabled people.

Housing charity Shelter condemned the judges' decision and claimed it raised the risk of homelessness.

Chief executive Campbell Robb said: "This ruling is devastating news for disabled adults and families with disabled or vulnerable children, who will be put at real risk of homelessness for having a bedroom they just can't do without.

"We're really concerned that these families will now face a real struggle to meet their rent and may end up losing their home."

Sense, the national charity for the deaf and blind, reported a "huge increase" in the number of calls it had received from struggling families.

And National Housing Federation chief executive David Orr called the situation "desperate", with disabled people forced to cut back on food and heating to keep their homes.

"The bedroom tax is a flawed and unfair policy that won't achieve what the Government hopes it will. The only fair solution is to scrap this policy now," he said.

The Department for Work and Pensions said the cuts were necessary but insisted it was still supporting the needy, unveiling another £35m in funding to councils to help residents.

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Dubai Plans To Repay Property Bubble Losers

Dubai will liquidate scores of cancelled building projects and use the funds to repay investors who lost billions in the emirate's property market, it has been reported.

The Dubai skyline has seen spectacular growth

State news agency WAM said a decree by ruler Sheikh Mohammed bin Rashid al Maktoum said a special legal committee would be established over the building bubble.

It will settle disputes related to projects that had been officially cancelled by the Real Estate Regulatory Authority (Rera).

Many Dubai labourers came from the Indian sub-continent

A crash of the emirate's property market in 2009 and 2010, which more than halved prices, forced developers to shelve or scrap hundreds of projects.

Some developers shut down and left Dubai without telling their customers.

Dubai Creek and the Carlton Hotel photographed in about 1978

Many individuals and corporations had bought properties and handed over the money while the projects were still in the design stage.

They never received the properties and were unable to recover their money.

One project, known as The World, failed to attract buyers

About 217 property projects were cancelled in Dubai between 2009 and 2011, data compiled by Rera showed last year.

They included a Tiger Woods-branded golf course and a 3,280ft-high tower to be built by state-owned developer Nakheel.

Dubai is now recovering from the crisis and property prices have begun to rebound, but the legacy of unpaid debts and unsettled contracts could weigh on the recovery.

Some buildings, such as the Burj Dubai, have become famous

The new committee will examine developers' financial status as well as cash transfers and deposits related to the cancelled projects, according to WAM.

"The committee has the right to take actions and issue decisions to guarantee the rights of those who have purchased property that fall into this category," it said.

The Palm Jumeirah was built out into the sea

WAM did not elaborate exactly how committee would ensure payments.

The new committee will supersede all courts in Dubai, including those in the Dubai International Financial Centre; implementation of verdicts issued by the courts on cases handled by the committee will be halted.

Some labourers lived in squalid conditions and said they weren't paid

Several state-funded mega-projects such as Nakheel's  Palm Deira, Palm Jebel Ali and the World - a complex of man-made islands - were sold to investors but later stalled.

They will not be handled by the new committee since they have not been officially scrapped, merely delayed indefinitely.

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Barclays Half-Year Profit Down 17% To £3.59bn

Barclays has reported a 17% drop in half-year adjusted profit of £3.59bn, as it announced a £5.8bn capital-raising rights issue.

It said adjusted income decreased 3% to £15bn, in the six months to June 30.

Barclays said a payment protection insurance (PPI) mis-selling provision of £1.3bn had been made and £650m had been put aside for provisions in relation to interest rate swaps.

The total mis-selling bill for the bank, which had been criticised previously for its aggressive corporate culture, now stands at £5.5bn.

In late Tuesday trading Barclays shares were more than 6% down at 288p.

The lender, which was hit last year by the Libor rate-rigging crisis, said it would seek a capital boost in order to meet capital requirements laid down by the Bank of England (BoE).

Barclays was criticised for its ethics under former CEO Bob Diamond (c)

Past problems continue to haunt Barclays and its cash call comes after the BoE last month told it to increase its leverage ratio - a measure of equity to assets - to reduce its risk.

Sky News City Editor Mark Kleinman said: "In the three full years since Barclays last raised equity capital from external investors, the bank has paid out £6bn in fines, £7bn in staff bonuses and just £2bn in dividends to shareholders.

"Investors will be asking tough questions about this latest cash call."

The rights issue will be for one new ordinary share for every four existing ordinary shares held and priced the issue at 185p per new ordinary share.

Barclays said: "This represents a discount of approximately 40.1% to the closing price on the London Stock Exchange of 309.05p per ordinary share on 29 July 2013 ... and a discount of approximately 34.9% to the theoretical ex-rights price based on the closing price."

The bank said its fundraising was a "bold but balanced plan" which would see it meet regulator demands by June next year.

It stressed it would not impact on its aims to boost lending to households and businesses.

However, shares fell around 5% in early trading as the rights issue was far higher than expected and as Barclays admitted its plans will put back some of the financial targets under its overhaul, dubbed Project Transform.

The bank will also issue £2bn of bonds that are turned into shares or wiped out if the bank gets into trouble.

Chief executive Antony Jenkins said the capital-raising plan enabled the bank to keep growth in its planned level of lending.

"I am certain the decisive and prompt action we are taking will leave Barclays stronger," Mr Jenkins said.

:: The bank said an estimated £42bn of Funding for Lending (FLS) capital was made to UK households and businesses in the six-month period.

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City Watchdog Rules Barclays Misled Investors

By Mark Kleinman, City Editor

The City watchdog has warned Barclays that it could impose financial penalties on the bank and some of its top executives as part of a probe into fundraisings that allowed the British lender to avoid taxpayers' clutches in 2008.

Sky News has learnt that the Financial Conduct Authority (FCA) has ruled that Barclays struck commercial arrangements on terms that were favourable to Qatari investors in the summer of 2009 which should have been disclosed to the stock market.

In a preliminary judgement handed to the bank late last month, the FCA expressed a view that the arrangements should have been disclosed to the stock market, according to people familiar with the discussions.

The FCA is understood to have told the bank, which on Tuesday announced plans to raise almost £8bn from investors through a combination of new shares and bonds, that it could seek to fine both Barclays and the executives involved, who include John Varley, its former chief executive.

In its half-year results statement on Tuesday, Barclays referred to the progress of the investigation without providing further details.

"The FCA and the Serious Fraud Office are both investigating certain commercial agreements between Barclays and Qatari interests and whether these may have related to Barclays' capital-raisings in June and November 2008.

The FCA investigation involves four current and former senior employees, including Chris Lucas, group finance director, as well as Barclays.

"The FCA enforcement investigation began in July 2012 and the SFO commenced its investigation in August 2012.

"The FCA provided its preliminary findings against Barclays on 27 June 2013 in respect of some of these commercial agreements. Barclays has responded on 25 July 2013 contesting the FCA's preliminary findings.

"Barclays expects further developments in the near term."

Barclays is understood to believe that the FCA's findings are without merit.

The authorities' inquiries centre on two fundraisings which handed Barclays more than £11bn, allowing it - unlike Lloyds Banking Group and Royal Bank of Scotland - to remain out of taxpayers' hands.

The new details come a day after reports that the SFO had requested an additional £2m in funding from the Treasury for its part of the investigation.

The probes pose a headache for Antony Jenkins, the Barclays chief executive, who is attempting to move Barclays on from the scandals of the recent past, which included a £290m fine for Libor-rigging last year.

Reporting half-year profits of roughly £3.6bn, down 17% owing to the cost of implementing Mr Jenkins' restructuring plan, the bank unveiled a deeply-discounted rights issue, which will involve issuing £5.8bn of new shares to investors.

Barclays and the FCA declined to comment further.

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Western Union Profit Down 27% In Online War

Money transfer network Western Union has seen a 27% plunge in quarterly profit as it struggles to fend off online rivals.

The world's largest money-transfer company reported the decline after cutting prices and spending more on its online business.

Revenue fell 3% to $1.38bn (£900m) in the second quarter as the company earned less from remittances, by far the largest part of its business.

Western Union has been cutting prices to beat smaller rival MoneyGram International and investing heavily in its online and mobile business to compete with Boom Financial and Xoom.

Expatriat workers from emerging nations often send remittances back home

"(The) company has made a series of pricing investments to recapture market share," Macquarie Research analyst Kevin McVeigh said.

Net income fell to $198.6m (£130m) in the quarter ended June 30 from $271.2m (£176m), a year earlier.

Overall remittances worldwide rose 5.3% to $401bn (£260bn) in 2012.

Remittance flows are a key financial flow for expatriate workers from emerging nations.

The method is used as senders and recipients do not always have access to the internet or bank accounts.

A Western Union outpost in a Sri Lankan camp for ethnic Tamils

According to the World Bank, remittances are expected to grow at an average annual rate of 8.8% to reach about $515bn (£336bn) in 2015.

Colorado-based Western Union's transaction volumes rose 3% to more than 60 million in the three months - more than 27,000 an hour - although transaction fees fell 4% to $1.01bn (£650m).

Total expenses for Western Union rose 3% to $1.10bn.

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Chinese Banking Giant In London Trading Swoop

By Mark Kleinman, City Editor

The Chinese bank that until recently topped the rankings as the world's biggest lender is in fresh talks to buy a major City of London commodities trading operation.

Sky News understands that Industrial & Commercial Bank of China (ICBC) has reignited discussions about acquiring the UK-based commodities and foreign exchange trading divisions of Standard Bank, the South African lender.

The talks are at a detailed stage and are expected to be concluded later this year, according to a person close to the situation.

ICBC, which notched up the biggest-ever stock market flotation in Hong Kong and Shanghai in 2006, is keen to get its hands on the businesses to cement its presence in the City and to give it greater access to vital markets for trading physical commodities.

The negotiations between state-owned ICBC and Standard Bank began late last year but were put on hold for several months during the once-a-decade handover of political power in Beijing which took place earlier this year.

However, insiders said the discussions had resumed in recent weeks with a large Chinese delegation visiting London earlier in July to continue negotiating with their South African counterparts.

The talks are focused on a similarly structured deal to the one envisaged seven months ago, with ICBC initially acquiring 60% of the Standard Bank units, and an option to increase the stake over time.

Fast-growing trade flows between Africa and China have fuelled the appetite of senior ICBC executives, who are being advised by investment bankers at Citi, to complete the deal.

If it does get finalised, it would not be the first transaction between the two sides. ICBC has owned a chunk of Standard Bank since 2007, when it bought a 20% stake for $5.5bn, and in 2011 it paid $600m for some retail banking assets in Argentina controlled by Standard Bank.

In April, the two banks agreed to lend up to 20bn rand ($2.2bn) to fund renewable energy projects in South Africa.

Insiders said that Standard Bank's desire to offload its commodities trading unit in London was not comparable to the decisions of major Wall Street banks such as JP Morgan to shift out of commodities trading for regulatory reasons.

The South African lender, which is Africa's largest bank by assets, said last year that it expected to cut up to 15% of its 900 permanent staff in London as it instead focused on its home continent.

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Lord Howell Sorry Over 'Desolate' North East

George Osborne's father-in-law has apologised after telling a shocked House of Lords fracking should happen in the North East because it is filled with "desolate areas".

Lord Howell of Guildford, whose daughter Frances is married to the Chancellor, claimed the controversial form of gas production could take place in the North East without any impact on the surrounding environment.

Environmental campaigners called the declaration "jaw-dropping" and Labour claimed it was further proof that the Tories are "out of touch" with ordinary Britons.

The Tory peer, who was energy secretary under Margaret Thatcher, argued that the same approach on fracking should not be taken in all regions.

"Would you accept that it could be a mistake to think of and discuss fracking in terms of the whole of the United Kingdom in one go?," he said at Lords Questions.

"I mean there obviously are, in beautiful natural areas, worries about not just the drilling and the fracking, which I think are exaggerated, but about the trucks, and the delivery, and the roads, and the disturbance, and those about justified worries."

He added: "But there are large and uninhabited and desolate areas, certainly in part of the North East where there's plenty of room for fracking, well away from anybody's residence where we could conduct without any kind of threat to the rural environment."

Anti-fracking protesters in Balcombe, West Sussex, on Tuesday

Despite the wave of stunned exclamations from peers, he continued unperturbed.

Turning to Energy Minister Baroness Verma, he asked: "So would you agree with me, that the distinction should be made between one area and another, rather than lump them all together?

"And if we can push ahead with this kind of gas production, then obviously it takes us fast away from the kind of coal-burning, which is increasing at the moment because of delays in authorising gas production."

Lord Howell later issued a statement apologising for "any offence caused" and insisted he did not believe the North East was "desolate".

"There are parts of the country that are less densely inhabited than others," he said.

"That includes parts of the North East but also other areas in the south of England as well.

"The shale gas industry should be encouraged to develop in a sustainable way where it is appropriate to do so and in way that ensures communities benefit, which could be in many different parts of country."

His comments came as protesters demonstrated for a sixth day at a rural site earmarked for exploratory oil drilling in Balcombe, West Sussex.

Lord Howell was a minister in the Foreign Office responsible for international energy policy from 2010 and 2012 and energy secretary from 1979 to 1981 under Margaret Thatcher.

George Osborne with wife Frances, Lord Howell's daughter

Labour's Baroness Farrington of Ribbleton was among those to speak out against his comments.

She said: "I declare an interest as a resident of Lancashire, who is aware of the enormous beauty of the Trough of Bowland.

"Would you, Minister, join with me in condemning the alleged remarks of protesters in the south of England, that all the fracking could be done in the north of England?

"And will you join with me in insisting that the beauty of Lancashire is as important, not more but as important, as the beauties surrounding, for example, Guildford?"

Baroness Verma agreed with Lord Howell that some areas of landscape would not be suitable for fracking and said he had made "some very important points".

Addressing Baroness Farrington, she added: "I'm sure that my noble friend did not say that Lancashire was (not) as beautiful. All parts of this great country are beautiful."

A Government spokesman later added: "Lord Howell is not a minister and does not speak for the Government. He has not been a Government adviser since April 2013."

James Wharton, the Tory MP for Stockton South, added: "I think his comments about the North East are foolish and ill-informed."

Tony Bosworth from Friends of the Earth said: "The Government's ill-conceived fracking plans aren't something that can be quietly brushed under the carpet 'up north' - as the villages resisting the drillers in the Tory heartlands of England's south show.

"It's time to pull the plug on the UK's dirty fossil fuel addiction and develop clean energy that won't cost people all over England their green and pleasant land."

Fracking involves drilling holes deep into the ground and then using high-pressure liquid to fracture shale rocks to release gas trapped inside.

Mr Osborne has said it has "huge potential" and plans for major tax breaks for shale gas income were unveiled earlier this month, to the fury of environmental campaigners.

They claim investment in the industry will distract from moves to develop renewable energy sources and also fear fracking could pollute water supplies and blight the countryside.

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