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Matt Simmons, Founder, Simmons And Company International
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(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)

MATT SIMMONS, FOUNDER OF SIMMONS AND COMPANY INTERNATIONAL, TALKS TO MARK CRUMPTON AND LORI ROTHMAN ABOUT BIGGER PROBLEMS FOR BP

MAY 28, 2010

SPEAKERS: MATT SIMMONS, FOUNDER, SIMMONS AND COMPANY INTERNATIONAL MARK CRUMPTON, BLOOMBERG NEWS LORI ROTHMAN, BLOOMBERG NEWS

12:05

MARK CRUMPTON, BLOOMBERG NEWS: One oil industry veteran says BP may have bigger problems and even larger leaks several miles away. Matt Simmons, founder and chairman emeritus of Simmons and Company International, it's one of the largest investment banking practices serving the energy.

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Matt joins us now on the phone from Houston. Matt, welcome back to Bloomberg News. Always good to have you on.

MATT SIMMONS, FOUNDER, SIMMONS AND COMPANY INTERNATIONAL: Thank you. What a tragic story.

CRUMPTON: Yes it is. And tell us about this other side of the story that we're hearing about maybe even another ancillary spill. What's going on?

SIMMONS: No, if the facts that are starting to come out are right, the ancillary leak is what the riser is all about. That's a minor thing.

CRUMPTON: Okay, so talk to me, then, about what we're seeing. We've been showing -

SIMMONS: A week ago last Sunday, the first research vessel from the National Underwater Laboratory was commissioned by NOAA and scouted the area.


And what they found, to their astonishment, was about - I think somewhere between five and seven miles away from where the riser is, was a gigantic plume growing. And it's now basically spread apparently to be a larger area than Delaware and Maryland.

And that would appear to be the stuff we're finally seeing coming onto the shore - this really sticky, orange brown stuff.

So what the plumes that are coming out of the risers were minor. And the only logical conclusion anyone can draw from this is the best estimates, just measuring the spread of this oil life, is about 3,500 to 4,000 feet underwater, is that it's probably flowing at the rate of 120,000 barrels a day.

LORI ROTHMAN, BLOOMBERG NEWS: Sow what is the status, then, that of the top kill, the so called junk shot that BP -

SIMMONS: It doesn't matter.

ROTHMAN: It doesn't matter? So then what's the solution? What do you need to see done here to contain this disaster?

SIMMONS: Well what we need to do first of all, in my opinion, is tell BP that it's time for them to leave, and bring the military in. And the military can work with the contractors, and the contractors will be far more relieved, because they'll listen to them.

The second thing we need to do is get probes down to figure out where this plume is coming from, and is that an open hole. Did the well head blow out?

And then third, how do we actually stop that flow? And from all of the best scientists that have thought about this in the last few days, probably the only thing we can do is create a weapon system and send it down 18,000 feet and detonate it, and hopefully case in the oil.

CRUMPTON: Matt, is that something that you believe is being contemplated at this time?

SIMMONS: No, unfortunately I don't think it is, because BP is still totally in charge of the news, and they have everyone focused on the top kill.

ROTHMAN: So what needs to happen for the government to officially remove BP from this containment effort?

SIMMONS: President Obama could do it today.

ROTHMAN: He could do it today? It's as simple as that?

SIMMONS: Sure.

ROTHMAN: And then you're talking about using weaponry. Won't that have - the collateral damage risk, that would have to be substantial. Explain to me how that would work and protect citizens.

SIMMONS: Several times in the last 30 years, the Russians had huge blowouts. And from our best reports, they actually figured out how to insert small nuclear bombs way down into the well bore.

If you're 18,000 feet under the seabed, that basically wouldn't do anything. Hopefully it will seal in the well.

And the second thing we need to do is recognize that there is a giant ocean - lake of this very gooey oil that's about 4,000 feet underwater. And that's where we need to send in the supertankers and basically start sucking them into the supertankers before the hurricanes arrive.

CRUMPTON: Alright, Matt, we're going to have to leave it there. Matt Simmons, founder, chairman emeritus of Simmons and Company joining us on the phone from Houston. Matt, thank you so much.

12:09

***END OF TRANSCRIPT***

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