BP sues Transocean, Cameron International, and Halliburton

On the one year anniversary of the Deepwater Horizon rig disaster at the Macondo well in the Gulf of Mexico, BP sued rig operating partners Transocean, Cameron International, and Halliburton for more than $100 billion.

BP faces a tab of $41 billion for its role in the disaster as owner-operator of the doomed rig, the loss of which led to the death of 11 mainly Transocean workers, and almost 200 million gallons of oil spewing into the Gulf of Mexico. It wants to share the financial pain.

Earlier this year a government report blamed BP for poor management decisions that allowed risky engineering procedures in the weeks leading up to the blowout. Halliburton was named for its role in improperly testing the cement seal at the bottom of the well, prior to gas penetrating the seal and beginning the chain reaction that led to the disaster. Transocean was cited for poor decisions when the well started to blow regarding how the material coming up the well from the ocean floor was handled, and which led directly to the rig exploding.

A later government report raised questions about the viability of the design of Cameron International’s blowout preventer in shutting down a massive oil well blowout.

In lawsuits this week BP is claiming that the safety systems on the Transocean-built rig all failed, that Halliburton’s “improper conduct, errors and omissions, including fraud and concealment, caused and/or contributed to the Deepwater Horizon incident,” and that Cameron International’s blowout preventer had a design flaw that rendered it incapable of fulfilling its primary blow-out prevention function.

Why all these lawsuits and why now? To some the move seems like a desperate ploy by BP to shift the blame, and a further example of the poor public relations strategy that has dogged the oil giant in the wake of the disaster.

However, from a legal point of view the company had little choice. The one year anniversary of the disaster was the legal deadline for parties to submit legal claims against each other. Even though BP’s chances of success are slim, and the other companies have submitted countersuits, April 20, 2011 was the deadline to file, even as a purely defensive measure.

It might also prove to be a financially successful strategy. The suits are unlikely to go to court as the public exposure of the events leading up to the disaster may further tarnish the images of all the parties involved. BP is possibly hoping that by dragging the others into a legal dispute, it may get an out-of-court settlement that does not leave it totally alone in having to pony up billions to pay for the damages caused by the rig disaster.

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Photo by J E Theriot 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.

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