BP (NYSE: BP ) , perhaps the world's most infamous company, tentatively seems to have gained control over the oil that has been spewing from its blown-out Gulf of Mexico well since April.
BP is testing a new cap on the damaged well, which was being drilled by a Transocean (NYSE: RIG ) rig that exploded, burned, and sank. But even if the two companies have permanently halted the gushing oil, BP's role as global villain may reach even greater proportions.
Fools may recall the 1988 bombing of Pan Am flight 103 over Lockerbie, Scotland. The tragedy left 270 dead, including 189 Americans. The only person convicted in the bombing was Abdel Basset al-Megrahi, a Libyan intelligence agent. Last year, a doctor maintained that Megrahi's battle with cancer gave him only weeks to live, which led to his early release from a Scottish prison.
However, the same doctor who then attached such grim prospects to the terrorist now says he could live for years. A group of U.S. senators, led by Frank Lautenberg (D-N.J.), now believe that BP played a role in the release, probably in exchange for a contract to drill in Libya's Gulf of Sidra.
The senators have requested that Secretary of State Hillary Clinton examine whether BP participated in gaining Megrahi's freedom. His release was included in a larger prisoner transfer agreement. Megrahi was not originally part of the exchange, but when then-British Secretary of State for Justice Jack Straw noted "overwhelming interests for the United Kingdom," he was added to the list.
On Thursday, British Ambassador Nigel Sheinwald denied that BP had a role in Megrahi's release. "I am troubled by the claims made in the press that Megrahi was released because of an oil deal involving BP," he wrote in a letter to Lautenberg et al.
Simultaneously, a House committee approved a bill that would ban companies with poor safety and environmental records from new drilling projects. BP, with 760 safety and environmental violations during the past five years -- versus only eight for ConocoPhillips (NYSE: COP ) and one for ExxonMobil (NYSE: XOM ) -- may have difficulty defending its record. It is, however, preparing to drill in Libya, where it may earn as much as $20 billion.
In or out of the Gulf of Mexico, BP will likely continue to ply its trade. However, I'd contend that my Foolish friends are far wiser owning shares in Big Oil leader such as ExxonMobil instead.