Is Big Oil Turning Against BP?

By: Laura Strickler
Topics: News

CBS News has learned that some oil and gas companies in the Gulf of Mexico are considering litigation against BP for lost revenue due to the Deepwater Horizon explosion and the environmental disaster it has caused. The administration's moratorium on deepwater drilling is said to have hurt revenues industry-wide.

But one legal expert says a lawsuit by an oil and gas company against BP for ruining the industry would be a tough fight in court.

"There's no cause of action for bad apples," said complex litigation expert Georgene Vairo of Loyola Law School Los Angeles. "Countrywide was a bad apple. Should we sue them?"

Vairo said the oil companies would have to find something in a federal statute that would allow them a private right to sue because there is no contractual duty between BP and their fellow oil and gas companies.

Special Section: Disaster in the Gulf

James Noe, general counsel for Hercules Offshore says that while his company is not suing he understands why others are weighing litigation.

"If you are pushed against the wall you explore all options and you ask, 'Who is responsible for this?'" he said.

Noe says industry losses extend beyond deepwater drillers who had to heed the moratorium, saying, "Make no mistake - there's a de facto moratorium on shallow water drilling." Noe says while the Interior Department used to approve 10 to 15 new shallow drilling permits each week, there have been no approvals in a month.

A spokesperson for the Interior Department says permits will be issued as soon as the shallow water drillers prove that they have complied with new safety measures.

Interior Secretary Ken Salazar said his office would work to reinstate the deepwater drilling moratorium overturned by a judge on Tuesday. New Orleans federal judge Martin L.C. Feldman struck down the moratorium saying it was causing "irreparable harm" to the industry and other affected businesses in the Gulf.

Exxon Mobil would not comment on any possible participation in a lawsuit against BP.

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