The quick back story The presidential oil spill commission released results this week that showed Halliburton cement used to seal BP's Gulf oil well was unstable, but used anyway despite multiple failed tests leading up to the Deepwater Horizon disaster. The results, which were described in a letter by the commission's chief counsel, shifted the focus -- at least momentarily -- off of BP and onto Halliburton (HAL), the cement contractor hired for the deepwater drilling project. As I noted Thursday, BP isn't out of the legal woods by any stretch. The test results did however, raise the liability stakes for Halliburton, which Wall Street acknowledged by shaving 8 percent off its share price to close at $31.68 on Thursday. [Shares have recovered much of that loss today.]
Ah, but not so fast
Halliburton issued a response late Thursday that tries to punch holes in the commission's investigation and its cement test results, which were conducted by Chevron in an independent review. Halliburton's main points:
- Chevron tested off-the-shelf cement and additives, whereas Halliburton tested the unique blend of cement and additives that existed on the rig;
- Halliburton can't provide the commission with the cement, additives and water from the rig because it is subject to a federal court order. But added the materials would soon be release to the Marine Board of Investigation.
- Halliburton disputes the commission finding that it didn't make BP aware of problems during one of the tests that showed the cement slurry was unstable.
For the final dagger, Halliburton questions BP's well design and adds that had BP run a cement bond log test or properly interpreted a negative-pressure test, those tests would have revealed problems with the cement. Halliburton also throws a couple of jabs at Transocean, the owner of the Deepwater Horizon oil rig.
This all can be boiled down to this: We were following orders and BP should've checked our work. Not that our work was bad mind you, but they should've checked anyway. Instead they didn't and we all know what happened next. And anyway, BP's design was bad and Transocean didn't do its job. It's not our fault, OK?
Photo from Flickr user striatic, CC 2.0