BP, Transocean, Halliburton, and Cameron International – which company will take the blame?

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With oil gushing at 5,000 barrels a day from a fractured well some 5,000 feet down in the Gulf of Mexico and frantic containment and clean up efforts underway, the question remains: Which company is responsible for the massive explosion and fire and eventual sinking of the Deepwater Horizon rig, resulting in 11 deaths, and an uncontrolled flow of oil into the Gulf? Oil and gas explorer BP, which had leased the rig? Transocean, the drilling rig contractor? Halliburton, which was engaged in well-cementing operations at the time of the accident? Or Cameron International, the company that made the blowout preventer which failed to stop the oil flow from the well?

An official inquiry to answer that question is meeting this week. A six-member investigative panel consisting of three people from the U.S. Coast Guard and three from the Department of the Interior’s Minerals Management Service is interviewing all the parties involved as well as survivors of the incident and technical experts.

Their conclusions and the apportioning of blame will have huge financial implications for BP, Transocean, Halliburton, and Cameron International, all major global players in their respective fields.

The leaseholder of the rig, BP, is funding the efforts involved in the cleanup, but BP Chief Executive Tony Hayward was at pains to point out in a press conference that “this is not our accident, but it is our responsibility.” 

The rig was designed and built under the specifications of Transocean, the world’s largest contract driller, and the Transocean personnel were operating the rig for BP at the time of the accident.  Transocean for its part claims that its contract with BP protects it from most lawsuits by injured parties onshore (fishermen, tourist interests, and state governments) affected by the oil spill. (It should be noted that nine of the 11 killed by the explosion were Transocean employees.)

Which brings us to oil services player Halliburton. One of the company’s specialties is cementing oil wells (indeed it originated the process of pumping slurry through a steel casing sheathing, the part of the pipe containing oil and gas; the hardened cement is supposed to stop oil or gas from seeping into adjacent areas of the pipe). Hallibuton has asserted that its four staff conducting cementing operations followed all the correct procedures.

And then there is Cameron International. One of the major factors in the disaster was the fact the blowout preventer failed to close. Cameron International made the equipment that failed to work. Was the system faulty? Was it installed incorrectly or did some part of the drilling process or the explosion compromise it? In addition, some three fail-safe mechanisms on or below the rig were supposed to have been able to cut the flow. The board will want to know why these did not work.

Someone is going to pay, big time. In a way they all have already. All the companies’ stocks have taken a hit in the last three weeks, with billions of dollars of market capitalization wiped off the board. But for one or more of these parties it will get a lot worse, depending on the results of the official inquiry.

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Photo by NASA Goddard Space Flight Center used under a Creative Commons license.
Stuart Hampton

British editorial veteran Stuart Hampton has been covering oil and gas companies for Hoover's since the Neogene-Quaternary period. Well, actually, since the early 1990s. For the best overview of the oil industry and its history he recommends Daniel Yergin's "The Prize." You can also follow Stuart on Twitter.

Read more articles by Stuart Hampton.

Comments

  1. What about wildlife??? Everyone’s worried about money. More people need to take a stand & fight for those who can’t fight for themselves. :(

  2. Frederick P. Matthes says:

    Wake up before it is too late.Apparently you folks care more about making big bucks than preserving the ecology.We have the solution to the
    Deep Water incident and have written numerous letters pertaining to the subject,but no one seems willing to take the time to at least give our
    recommendations a close scrutiny – believe me,we are not some sort of crackpots,and to tell us that more than 80,000 suggestions have been sent in – which supposedly take time to review is a poor excuse in this
    catastrophic situation. Do something now and listen to folks who are very concerned….

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