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QUEST MEANS BUSINESS
Libyan Oil Minister Denies Deal With BP For Freedom Of Lockerbie Bomber; Apple Will Placate iPhone 4 Users With Free Cases; Goldman Sachs Will Pay $550 Million To SEC On Fraud Charges
Aired July 16, 2010 - 14:00:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, CNN INT'L. ANCHOR, QUEST MEANS BUSINESS: There was no deal for BP on the Lockerbie bombers release, Libya's oil chief tells me, tonight.
Getting a grip on the glitches, Apple tackles problems with the iPhone 4.
And a record fine and a dose of humiliation, but is the worst now over for Goldman Sachs.
You'd never know it was the end of the week, it's been that busy. I'm Richard Quest. I still mean business.
Tonight Libya's number one man in the oil business talks exclusively to QUEST MEANS BUSINESS and denies any link between BP and the release of a convicted Libyan terrorist.
Abdulbasset al-Megrahi was jailed for the Lockerbie bombings which killed 270 people in 1988. Megrahi was released by the Scottish authorities on compassionate grounds last year. At the time it was believed he had only months to live. Now there is speculation that BP put pressure on the British government to grant al-Megrahi freedom. And in return they would be protecting their business interests in the region. BP secured an oil contract with Libya in 2007. BP is already admitted publicly urging the British government to complete a prisoner swap treaty. The company denies making any direct references to al-Megrahi. However, in the United States, lawmakers don't buy that. They are holding investigations.
SEN. CHARLES SCHUMER, (D) NEW YORK: As the lawyers would say, the circumstantial evidence is overwhelming. A, the BP asked the British government to put al-Megrahi on a prisoner transfer list as early as 2007, while they were negotiating with Libya. B, he's put on this list, and the doctor claims that he only has three months to live and it meets Scottish law, humanitarian parole. Now, the doctor comes out and says, well, he really has 10 years to live and he's as fit as a fiddle. And BP, of course, got the contract shortly after his release. I think that is a pretty good case, even in a criminal trial.
(END VIDEO CLIP)
QUEST: Charles Schumer in Washington. The question, of course, was there a deal? Libya has denied any such link. Earlier I was joined by Doctor Shokri Ghanem. He is the chairman of the National Oil Corporation of Libya, effectively, the minister of oil for the country. I asked him about the claims of a connection, a quid pro quo, between the British government, BP, and the release of al-Megrahi.
H.E. DR. SHOKRI GHANEM, CHAIRMAN, NAT'L. OIL CORP., LIBYA: You hear them-by senators for a reason or another. But let me ask these senators themselves, we signed agreements with American companies. We signed agreements with Chinese companies, we signed agreements with the French government. Why don't they talk about that.
GHANEM: This is-
QUEST: BP admitted, in its own statement.
QUEST: That it was concerned that the prisoner treaty transfer was hindering it abilities. It said in its statement.
GHANEM: You see, all over the world, when you are have a commercial agreement with some country, and if you have some other problems, you as a businessman or as an investor, you may be concerned. But this does not mean that you made the agreement to help in this or to help in that. But, of course, you would love always to see the relations are good between your country and the country of the investment.
QUEST: People find it hard to believe that there isn't a connection. Mr. Megrahi gets released, six weeks later the deal is ratified.
GHANEM: I'm sorry to say, no. I'm sorry. We signed the agreement in 2007. And we started negotiation on this agreement maybe since 2004. The agreement was signed in 2007. Megrahi was not released until 2009. So, that was a long time. But you see this-the people are saying things which are not true all the time.
QUEST: So, just to clarify. Are you, Doctor, do you deny that you spoke to BP about any form of connection.
GHANEM: Will I tell you something?
GHANEM: I was leading the negotiations on BP. I was the person who was negotiating the technical, and the whole agreement. I never spoke, any political, nor I accept any political interference. And I was discussing this agreement for almost two years.
QUEST: So, why did BP say, do you think, that the political transfer treaty was hindering the commercial ability of them in Libya.
GHANEM: No, you see it is the same with me. You know, as a Libyan, sometimes if I'm going to another country and my country has a problem. Or there is no good relations with the other country, I would be worried about whether my visa will be given-ah, this is sometimes, it is natural that you would prefer to have good relations with some country, to pass the good word, maybe, but.
QUEST: And yet the difficulty here, Minister, is that there is a lot of smoke, and some people are pretty sure there is a fire somewhere.
GHANEM: There is no fire, believe me. Smoke, you can put smoke anytime, but as I told you, why they don't speak that we gave so many agreements to American companies, to French companies, to Chinese, to both Chinas, Taiwan and Mainland.
QUEST: So, BP wasn't a conduit for you from the British to the Libyan government? BP didn't carry the message: Give us this. This is what the deal is. You weren't negotiating like that?
GHANEM: We-I negotiated with BP like with others, almost 50 companies came into Libya between 2005 and 2009. Why they are just singling out BP?
QUEST: They are singling it out-
GHANEM: Shell is there. Shell came there. Exxon is there.
QUEST: Yes, but they are singling it out, because the deal was in 2007. Megrahi is released in 2009. And the ratification of the agreement, by the Libyan government, comes after that.
GHANEM: That is not true. I'm sorry to tell you. The agreement was ratified in 2007, when I speak about ratification. The agreement was negotiated since 2005. BP was working since 2007, in Libya. For two years they were working seismic (UNINTELLIGIBLE). And now they are going to start drilling.
QUEST: Are you worried that the U.S. authorities are now about to hold hearings and they really believe that there is something under the agreement, or that there is an agreement, or there was a tacit understanding, BP gets its rights, the Libyans get al-Megrahi.
GHANEM: It begins with the U.S. can do any hearings they want, this is their business, but we are a sovereign country. This is number one. American Congress can do whatever they want. But senators, they have to give the impression that they are U.S. senators. Not for other reasons, they are mentioning things.
QUEST: Robust defense there of his country's position, Doctor Shokri Ghanem, the head of the Libyan Oil Company.
Britain's ambassador to the U.S. says the release of the Lockerbie bomber was a mistake now in the view of the British government. Allegations of a link between BP and Megrahi are damaging U.K. commercial interests. CNN's International Security Correspondent Paula Newton is with me.
And, this evening, the U.S. secretary of State has an extraordinary statement or request to the U.K. government.
PAULA NEWTON, CNN INT'L. SECURITY CORRESPONDENT: She categorically told Mr. Hague, the British foreign secretary, today, that he expects, quote/unquote, "there to be communication between the British government and Congress holding hearings at the end of this month about what happened with this deal."
The political pressure in the United States right now is immense. That is why we saw this statement, the extraordinary statement of the British government, pointing out from their ambassador the United States, pointing out, this is a new government. We also believe the release of al- Megrahi was a mistake, but there is nothing we could have done about it.
QUEST: The previous government, of Gordon Brown, basically did a- it's not us, Gov. It is not our responsibility, it is the Scottish government.
NEWTON: Scottish judiciary, they are under a lot of pressure, right now. They are saying, look, we did it on compassionate grounds. We had medical evidence in front of us, some people say that medical evidence was compromised. Mr. Megrahi-it does say, al-Megrahi is alive and well in Libya today, and many people think he is a hero. And that is galling, Richard, for the families.
Going back to politics for a minute, we saw the senator from New York.
NEWTON: Dozens of students from Syracuse died in that crash. How many phone calls do you think he's getting to his office right now? Saying, and we know from victim's families, this is was blood money. We are sure if you have hearings you can prove it.
QUEST: Paula, I covered Lockerbie. I was at Kennedy Airport the night that it happened. I'm sure that you remember the incident as well, yourself. And at the end of the day, though, will we ever get to, was there an agreement, or even an understanding between everybody?
NEWTON: I think that to use a term, BP's comments have muddied the waters. And I think that there comments were highly compromising. And I think that right now, given the fact that we now have this huge oil spill, hopefully wrapping up in the United States, politically, supercharged, we will hear more about this at the end of the month. And it is just not going away. It is not going to go away, this issue.
QUEST: Paula, many thanks, indeed.
Paula Newton, got my Paulas mixed up there for a moment.
When we come back in just a moment, we'll also have the second part of that interview with the Libyan oil minister. We're going to talk about the role that BP now has in his country. Will they be more careful about letting it drill in deepwater.
Also, Apple and the iPhone 4, well, now Apple says it is all a fuss about nothing, but even so, we'll give you a free case to help you sort it all out. In a moment, QUEST MEANS BUSINESS, good evening.
(DESK BELL CHIMES)
QUEST: If you are not an iPhone user and you've never tried the iPhone 4, you might wonder what all the fuss is about. But it is a fuss. And tonight Steve Jobs, the head of Apple, is offering disgruntled users of the iPhone 4 a cure. After mounting pressure on the state of the art smart phone about reception problems. The mind behind the maker, Apple, went the public.
There was a news conference in California a short time ago. And the Apple chief exec said, one-he said, the iPhone 4 users will get a free case to fix the transmission problems. He also added the return rate on the iPhone 4 is 1.7 percent. And, to put the boot in further, the return rate for the previous version of the smart phone was 6 percent. That seems to suggest all is sweetness and light, and the critics perhaps just got some sour grapes.
We need to talk about this. In New York, the technology expert Shelly Palmer, always helps understand these matters. Managing director, Advanced Media Ventures Group.
Shelly, look at what Jobs has said. Storm in a teacup, not a big deal, return rates low. They even had a joking video at the beginning. Do you think that Apple iPhone users will say, yeah, we're here. We're cool. Get over it.
SHELLY PALMER, HOST OF "DIGITAL LIFE WITH SHELLY PALMER": I think this is so blown out of proportion it is almost unimaginable. I can make my iPhone drop a call by holding it exactly the way you are supposed to make your iPhone drop a call, by holding it. If you grab it and grab the lower left hand side, it is going to obviously loose bars and drop a call. But you know what, it didn't make me want to return my iPhone. I don't want to put in a case. I don't hold it that way in practice.
PALMER: I hold it like this. It is not a big deal.
QUEST: OK, stay there. Let us listen to Steve Jobs talking. And we'll come back to you, Shelly, in just a moment, on the question of whether or not-never mind technologically, but PR. But first, let's listen to Steve Jobs in California.
(BEGIN VIDEO CLIP)
STEVE JOBS, CEO, APPLE COMPUTER: It hasn't been three months on this product. It has been 22 days. And, you know, Apple is an engineering driven company. We've got some of the finest scientists and engineers here-in the world-in the areas that we need creative products. And the way we work is we want to find out what the real problem is, before we start to come up with solutions. And so we have been working our butts off for the last 22 days to understand what the real issues are here, so that we can come up with real solutions.
(END VIDEO CLIP)
QUEST: It was a bravado performance of, some would say, hubristic performance, Shelly.
QUEST: But has it actually, you know, is it the right performance, I suppose, for the PR (UNINTELLIGIBLE)?
PALMER: You know what, would you expect something different from Steve Jobs? Look at Apple's track record. Apple is not a company, it is a religion. And Steve is the high priest, and they are supplicants. And there are people who are trying to equate Apple with an ordinary organization, or an ordinary company. That is not what it does. The magic of Apple is that we've changed behaviors. We've all behaved differently when we use Apple products. From the very first desktop publishing available to Macintosh users, right through now, to the iPhone. This is magic in your hands. This is a tiny little bump in the road.
QUEST: Careful, Shelly, you sound like you've drunk the Kool-Aid, as you Americans like to say.
PALMER: Not at all, not at all. It is a-Richard, it is a behavior changing technology. Every product they have made has made a huge sociological impact. This is a small technical glitch. And it is a technical glitch, and they admitted it. Steve tried to pawn it off as an industry problem. The real problem is that the antennae is external on an iPhone 4. And it isn't external on other devices. And so, yes, they have weak spots, but this has a real weak spot. You can absolutely attenuate the signal by holding this phone the wrong way.
QUEST: Let's just wrap this up then. Does this go away with Apple merely having a bloody nose as a result of it? Or, has the-I'm going to mix my metaphors delightfully here-has the tarnished well and truly gone onto the gold-plated name of Apple?
PALMER: I think that they are going to benefit from this. They have done the right thing. They are stepping up and saying we're going to get it fixed. Let's give these guys a little benefit of the doubt. I'm not a fan boy, but I have got to tell you, this has been so overblown. It really has been sensationalized to a point of silly right now.
QUEST: All right. Shelly, wonderful to have you, as always. You make sense.
PALMER: Always good to be here.
QUEST: You make sense on these difficult matters and help us understand. Shelly in New York.
We need to go back to-we'll stay in New York. Richard Roth is in New York with Apple users.
Richard, are they convinced by what they've heard?
RICHARD ROTH, CNN INT'L. CORRESPONDENT: Well, we're going to find out. Here on a sidewalk of New York, on a sweltering hot day. We have three people here.
Nate, you had an iPhone already. What did you just do in the Apple store that is behind you?
UNIDENTIFIED MALE: I just went to go claim one of the bumpers that they're going to be giving out in lieu of this whole antennae issue. I had to pay for it. Hopefully, I will be getting a refund check sometime in the next couple of weeks.
ROTH: So, even though the big man out West said you'll get it back, you still had to pay for it today.
UNIDENTIFIED MALE: Yeah, well, I wanted to claim one, because they said that, what, 3 million of them already sold? So-
ROTH: Yeah, they don't have that many supplies. Are you angry or upset at you're -were you having phone troubles with your iPhone 4?
UNIDENTIFIED MALE: Yeah, I mean, being one with not such petite hands, I've been having issues here and there. You know, I waited here, about a month ago for six hours to claim my device. And now that I finally have it, I've been enjoying it. I'd like to get maximum usage out of it.
ROTH: All right. Don't go away.
What is your reaction to this product that you have now, and what Steve Jobs has said, free bumpers, maybe from another company, because they are going to run out. You've got to request it by the end of September.
UNIDENTIFIED FEMALE: Well, I bought the bumper when I bought the phone. So, I'm going to go online and try to get my money back for buying the bumper. I personally haven't had such and issue, because I don't speak on the phone much. I'm a texter. I don't-so maybe two of my calls have dropped. But it hasn't been so bad for me.
ROTH: All right. Rory, originally from England, what do you think about Apple and its leader Steve Jobs saying, in a way, not a big deal, other products have had these problems. You have an iPhone 4, if you can prove it, have you had problems? And what is your reaction to the Apple announcement?
UNIDENTIFIED MALE: I didn't have problems at all with the phone. I used to have the 2G phone before I got this. And I was also queued up on the release date and I got this. I just kind of forgot to get the bumper on the day it was released. But really didn't have any more problems with it than I had with the 2G. I mean, the 2G dropped calls. But in my opinion, the telephone is kind of gone the way of the fax machine and-
ROTH: No, no, no, don't tell me that.
UNIDENTIFIED MALE: It's true. It's true.
So, unless this can send faxes, it really doesn't bother me that much. I mean, I just didn't have much problems with it. But I was going to get a bumper anyway, to protect it. I'm just taking advantage of it being free, I suppose.
ROTH: Do you think that Apple's image, Nate, is taking a hit from this, or has-briefly?
UNIDENTIFIED MALE: I mean it is nice to see them go out and try to accommodate the people. At the end of the day most of us spent a lot of money on this device, so we would want to get compensated. I think it may take a bit of a toll, but this device has so much more to offer than other phones out on the market. I think a little antennae issue isn't going to make such a big deal out of it.
ROTH: OK, thank you, Nate.
Was it Jane? Jane and Rory, three perspectives. And I think we talked to a lot of people in front of this Apple store. It is no big deal for a lot of customers so far. Even in this heat, Richard, we'll see if they get their money back for their products and keep the faith with Apple. Back to you.
QUEST: And many thanks, Richard Roth joining me from New York.
Before we take a break, let's leave you with the man himself, Steve Jobs. Talking about the problems with the iPhone 4 and reminding, or perhaps saying, everybody has got some problems.
(BEGIN VIDEO CLIP)
STEVE JOBS, CEO, APPLE: What did we learn? The first thing we have learned is that smart phones have weak spots. This is not unique to iPhone 4. This is a property of smart phones. They have weak spots. You can grab them in the course of normal use-and they're all different, but you will drop reception.
(END VIDEO CLIP)
Well the world's biggest company's are booking billions of profits tonight. Bank of America, Citigroup and General Electric, they don't get much bigger than that. The all posted headline numbers and they look impressive. At least, if you start to take it apart then perhaps you see weaknesses and we'll show it will all show investors exactly what it means. Let's break down those results and the best way is for that, join me over in the library.
Where we start with Bank of America, $3.1 billion Q2. It beat estimates slightly down on last year. But of course it was the trading revenue that was down. Now that trading revenue, look, we always knew that the trading revenue was going to be down this time. Fees, earnings, investment banking, the way it has been going this quarter, that was a cake that was baked and we knew it was going to happen. There was less provision, of course, for bad loans and losses, as we have seen the previous session. So, of course, that is why Bank of America, $3.1.
Also, Citigroup, that is 2.7 billion. The other bank I was trying to remember just then, was J.P. Morgan Chase, with the provisions. Here Citigroup beat profits 37 percent, it beat expectations, but it was down quite heavily on the same period. And that, again, was expected but perhaps not as much as we've seen there, $2.7 billion. It was the revenue side that fell there.
And over to General Electric, net income jumped 16 percent, to $3.1 billion. The chief executive Jeffery Immelt says that the company is on track, for solid earnings growth. But of course, GE is still a company in transition, having to divest itself of various different parts of the company. And those results are reflect that accordingly.
Investors on the Street were in now doubt as they reacted to these results. Look at the numbers at the moment. The Dow Jones industrials is off sharply. Alison Kosik is on the floor of the stock exchange.
Which begs the question, all right, there results were OK. They weren't brilliant. They weren't bad. So why is the Dow tumbling out of bed?
ALISON KOSIK, CNN FINANCIAL CORRESPONDENT: The one thing that Wall Street is doing, Richard, is they are looking at those Bank of America and Citigroup earnings. And they are comparing them to last year and the problem is those figures are less this time around compared to last year. And of course, that is a big disappointment here on Wall Street.
They are also looking at the outlook. Those two banks didn't post a strong outlook so obviously that is hurting the markets today, as well. And as you said, we got those downbeat results from GE. Google shares, Goggle also posted a downbeat earnings report as well.
I want to give you some figures now. Bank of America is down 8 percent; Citigroup off about 5 percent; and Google off 5 percent, and GE shares are down 3 percent. And, of course, not helping matters, some economic data we got about consumer sentiment today, it fell much more than expected, showing that consumers are beginning-or continuing to be-more and more pessimistic and that is weighing on the market today, Richard.
QUEST: Is the feeling on the floor that that 10,000 on the Dow is in danger in the next few sessions?
KOSIK: It very well could be. I mean, you know, we had a great rally all week. But what is happening today is sort of going to push back to where we started at the beginning of the week. So sure, especially this talk about consumer sentiment, following as much as it did. It fell 10 points and that is a big fall. And that the worrisome thing, it sort of brings back that discussion about that double-dip recession again. That if consumers are feeling this pessimistic they are not going to go out there and buy. If they're feeling unsure and not confident about the jobs market, especially, Richard.
QUEST: Alison, we're going to say good bye to you, but just before we do, remind me what Goldman Sachs share are doing, because that is where we are going next on the program.
KOSIK: Yes, Goldman Sachs, they are the standout today, up 2 percent after they made that settlement with the SEC. They've agreed to write that check for $550 million to the SEC to settle those fraud charges. The market feeling good about that, Richard.
QUEST: Alison, many thanks, indeed.
KOSIK: You got it.
QUEST: Alison Kosik at the New York Stock Exchange.
We'll continue to look at that story now; $550 million, half a billion, might look like a lot of money and a penalty to you and me. It is the biggest in Wall Street history. Investors thought it would be more than that. Most of the money goes to the U.S. Treasury, $350 million goes there. The other $200 million get divvied up between RBS and Deutsche Bank, who will share $250 (sic) million, $100 and $150, I can't remember which way it goes around. I think RBS gets $100 million.
The Securities and Exchange Commission says the settlement must now be approved by a judge.
(BEGIN VIDEO CLIP)
ROBERT KHUZAMI, HEAD, SEC ENFORCEMENT DIVISION: It is a stark reminder, a very stark reminder, that there will be a heavy price to be paid if firms violate the principles fundamental to the securities laws: Full disclosure, honest treatment, and fair dealing. And those principles do not change regardless how complex the product, or how sophisticated the investor.
(END VIDEO CLIP)
QUEST: Now Goldman Sachs sent us this statement. "We believe this settlement is the right outcome for our firm, our shareholders and our clients. We understand that the SEC staff has also completed a review of a number of other Goldman Sachs mortgage related CDO transactions and does not anticipate recommending any claims against Goldman Sachs or any of its employees with respect to those transactions."
But at the same time, the settlement leaves open the door for future civil suit and possible criminal implications and Fabulous Fab, Fabrice Tourre, is still under jeopardy. He, of course, was the man at Goldman Sachs who put these deals together.
Now, we need to Sean West, U.S. financial analyst at the Eurasia Group. Sean joins me now, live from New York.
SEAN WEST, U.S. FINANCIAL ANALYST, EURASIA GROUP: Hi, Richard.
QUEST: Sean, it really is a very simple first question. Did Goldman get off Scott free? Half a billion is chump change?
WEST: Well this is still a lot of money. I mean, the firm probably made a calculation that it was better to pay up front than it was to drag this out over many years, as we all know that they could have. And to get their names sort of out of the spotlight, to allow the SEC to move on to analyzing other deals from other firms and looking at other transactions than to continue to have them in the spotlight.
So, did they get off easy? Well, it is still $500 million. That is half of what analysts expected.
QUEST: Yeah, but-
WEST: That they would have had to pay, but it is still a lot of money.
QUEST: Right, but let's forget the money, though, because the firm is a veritable printing press for cash. Let's look at the reputational question. Will Goldman's name-I mean, tonight's program is effectively all about reputation, whether it is Apple's, BP's, Goldman Sach's. Is it tarnished as a result of this?
WEST: In general, the answer is probably yes.
Was this the smart -- the smart move to move on and sort of limit that tarnish?
I mean I think one of the other big changes is the Senate just passed the financial regulation bill. It's going to move on to -- to the president for his signature. And that's going to sort of remove the general public scrutiny of financial firms, or at least dial it back for a period of time. I think we're going to move on to other issues...
WEST: -- we're going to move on to the economy in general.
And so, in a sense, we're moving into a period of kind of less focus on financial firms. So it was smart for Goldman to get the focus off of them specifically...
WEST: -- during this time period.
QUEST: Sure. And I don't want to turn you into sort of the de -- the public defender for the banking industry. But you and me and everybody who's interested in the financial world sat and watched Lloyd Blankfein and the executives before Congress discussing this. And at the time, we all thought they were in it up to their necks.
But they still denied they'd done anything wrong. And then out comes the checkbook.
Have they learned nothing?
WEST: Well, I -- you know, I think -- I think the fact that they would cut a back that is this big admits that they were at least nervous about where this was going to go. I mean they sounded pretty confident they had done nothing wrong, then they wrote a check for $550 million.
You know, there's -- the question of whether they -- they've learned nothing, I mean I think these -- these firms learned a lot. They learned that the bigger the crisis, the more painful it can be when the government tries to clean up the mess and when the government tries to decide how to move forward.
The government spent almost a year or more debating financial regulatory reform. During that time, there have been swings in the shares of the big stocks. The government sort of injected a lot of uncertainty...
WEST: -- into the future of the sector. Now we have a lot of new rules that the government has to clarify and analysts have to understand just what the impact of those rules are going to be on the sector.
So, you know, they've learned that if you create a mess, the government is going to come after you and clean it up. And I think that lesson rings true for a lot of these firms, that are more aware now of political risks than they might have been during the bubble years.
QUEST: Sean, many thanks, indeed, joining me from New York.
Wirt with you in just a moment, part two of the exclusive interview with Libya's oil chief.
So what has Libya told BP about how it is expected to operate in the future and what's BP said about learning from its mistakes, in a moment.
QUEST: Hello, I'm Richard Quest, QUEST MEANS BUSINESS.
This is CNN. And on this network, the news always comes first.
BP officials say they're encouraged by tests on the containment cap that, for now, has stopped oil from leaking into the Gulf of Mexico. Nearly 24 hours on, pressure inside the cap is rising, which indicates there probably couldn't be any other leaks. Testing will continue for another 24 hours. Officials stress this is not the permanent solution. They expect to resume siphoning oil to the surface after the test is complete.
Interpol says it has arrested some 5,000 people across Asia and seized nearly $10 million in a coordinated sting against illegal gambling during the World Cup. The international police agency said it raided hundreds of illegal betting dens in China, Malaysia, Thailand and Singapore.
Twenty-two days into Antennagate and Apple's chief executive, Steve Jobs, has defended the company's handling of the problem. Mr. Jobs admitted that the iPhone 4 drops more calls than its predecessor, but says the issue has been blown out of proportion. And Apple's solution is free cases for the phones. The cases are called bumpers for everyone. If that's not good enough, then you can return the phone within 30 days for a full refund.
So to our leading story tonight. And as you've heard, Libya's oil chief has denied that there's any link between BP and the release of the Lockerbie bomber.
The second part of my interview now with Shokri Ghanem, the chairman of the National Oil Corporation of Libya.
We turned our attention to the issues of BP, which actually has a contract and an agreement to drill in the deep waters of Libya's coast.
So, bearing in mind what happened in the Gulf, is he now worried that something similar could happen off Libya.
(BEGIN VIDEO CLIP)
SHOKRI GHANEM, CHAIRMAN, NATIONAL OIL CORPORATION OF LIBYA: Not at all.
GHANEM: I'll tell you why. Because, first of all, this is -- BP was drilling in kind of a new environment. This is a new frontiers in the oil industry -- 2,000 meters below the water. And then an accident happened. It can happen to any company. If I may even say so, that, in a way, the world is lucky that it happened with BP and did not happen with a small company who have no enough money and resources to do and to implement all what BP did.
As a matter of fact, this could happen to any company.
QUEST: But the -- the evidence is coming out that BP clearly, according to the U.S. authorities, took shortcuts, put, arguably, allegedly, profit before safety.
GHANEM: Well, I mean, to begin with, the result of their investigation is not ready yet. We are waiting for that. This is number one.
Number two, oil companies are trying to -- sometimes the economy -- you have to remember one thing, that in drilling offshore, the -- the rig itself sometimes costs you a million dollars a day. So, you know, sometimes you have to try to be -- not cutting corners, by the way, but try to be more economized in one things. But I don't know whether this is what happened or not.
But by the end of, if it happened to another company, we would have been in real trouble. The American government or any other government would be troubled. They would be spending on cleaning the...
QUEST: So you're saying, actually, so -- so you're saying that it's more fortunate that it's a company with deep pockets?
GHANEM: Well, exactly. This is number one.
Number two, also because it is -- now we are talking about BP. Let me tell you something. It is not only BP. There are four other companies working with BP. They have some of their partners...
QUEST: But don't you...
GHANEM: -- they have some...
QUEST: But don't you think it might be cause for a rethink of your project in -- off -- off the shores?
GHANEM: No. I think, well, you know, after what happened, this will make BP more cautious, more observant and also for us, we would -- we spoke together. We spoke together. I met with Tony Hayward. We spoke about this. We spoke about the future. We cannot -- if you have a -- god forbid, if you have a plane crash, you don't stop flying. You don't stop the air transport (INAUDIBLE)...
QUEST: But will you be demanding of them new rules, new procedures, new strictures?
GHANEM: No, we are looking at all the procedures they are following. We will, together we have a committee sitting down together looking very carefully because we are much interested, also, in the military area.
QUEST: So you are -- so you are looking at things more closely as a result of deepwater?
GHANEM: Of course. That -- BP itself is looking, as well, more closely because no one would like to see something like this happen again. Together, we are looking very deeply and concerned very much. But we are taking all the needed steps. But I think that we will do it and we will do it and we will do it different.
QUEST: Does Libya have any aspirations to take any of the assets or investments in BP?
We know that BP is looking for money and would like some partnerships.
GHANEM: If you ask me...
GHANEM: I will tell you one thing. I think BP is a good buy for another who would like -- as a bargain hunter. For Libya, whether Libya will buy or not, unfortunately, I am not in the Libyan Investment Authority. If they take my advice, I will say yes, buy in BP.
QUEST: And do you think they will?
GHANEM: I don't know. You know, sometimes it takes time to decide for them to have their more priorities...
QUEST: You're not saying no...
GHANEM: But I would (INAUDIBLE)...
QUEST: You're not saying no, so I'm taking that as a qualified possibly.
GHANEM: It is possible. I mean I -- if I were -- if I were there, if I am my responsible and then (INAUDIBLE) investment, I will buy.
What do you want more than that?
I will buy. If I have enough money, I will buy. If you want me to advise you, go ahead and buy and you will make money on the BP industries.
(END VIDEO TAPE)
QUEST: Shares can go up as well as down.
I'll be back after the break.
QUEST: There's a lot of wind about, I'm told.
And Guillermo Adruino is at the CNN World Weather Center.
GUILLERMO ARDUINO, CNN METEOROLOGIST: What kind of wind?
QUEST: Forget the -- forget the cheese and pickles and concentrate on the maps.
OK. The British Open taking place in Scotland and we saw that the wind was so severe that, at times, the ball at the green cannot stay -- it couldn't stay still. It actually kept moving. So they had to cancel. They had to stop the plays. And now we are dealing with some winds there, much better. But are we going to have the possibility of some more alterations of the play because now it's up at 44 kilometers per hour. Edinboro at 33. It's changing. In the last hour, it was the other way around.
So you see that where you see the pinkish orange color hear means that the winds are -- the deeper the color, the more intense the winds are. So we know that it's going to continue to be breezy, windy. I wouldn't be surprised if it gets stopped again.
Let's look at all the heat now, Richard. More records in Russia, Poland and the Ukraine, you see?
These cities are very far apart, though. The records continue to be beaten in this case, though the low pressure center in Britain is bringing the bad weather. It's rising and moving into the north. It's going to cool down areas like Germany, where we were with severe heat warnings, too. But the heat will continue in the east at least for two or three days. And the storms popping up here in the southern parts of Germany. London, though, I think -- and, Richard, I think Sunday will be a nice day for you. Clouds on Saturday, but Sunday will be nice.
QUEST: Which is just as well, Guillermo, because I'm off to the Farnborough Air Show and the -- on the program comes from Farnborough...
QUEST: The air show on Monday.
All right, Guillermo, many thanks, indeed.
QUEST: This is QUEST MEANS BUSINESS for tonight.
I'm Richard Quest in London.
Whatever you're up to in the hours ahead, I do hope it's profitable.
"MARKETPLACE MIDDLE EAST" starts right now.