Wednesday, 22 June 2011
Transocean report pins oil spill blame on BP
By Matt Daily
NEW YORK | Wed Jun 22, 2011 3:17pm BST
(Reuters) - Oil driller Transocean Ltd blamed BP Plc in a report released on Wednesday for last year's Gulf of Mexico spill in the latest skirmish between the two companies over paying the costs for the maritime oil disaster.
Transocean, the owner of the drilling rig that exploded and sank in the Gulf of Mexico last year, and BP are locked in a legal battle over which company was at fault in the disaster that killed 11 workers and gushed crude oil into the Gulf for three months.
Costs for capping the Macondo well, cleaning up the damage and paying claims for people hurt by the catastrophe are likely to top $41 billion, including an estimated $4 billion to $5 billion in fines.
BP has struck deals with a partial owner of the well and an oilfield service company that will give it about $1.2 billion to help cut its liability, but its dispute with Transocean centers over the key issues that led to the accident.
Transocean CEO Steven Newman has held discussions with BP and was keeping an "open mind" on reaching a financial settlement that could avert a courtroom battle, Chief Financial Officer Ricardo Rosa said last month.
One market analyst said the report would probably not affect those discussions, and said indemnity clauses contained in Transocean's contract with BP have good chance of shielding it from liability.
"If I was Newman I'd make a go at it and take my chances (in court)," said Joe Hill, analyst with Tudor, Pickering, Holt & Co in Houston.
Still, BP was also not likely to let Transocean settle the matter easily, and any deal would likely be in the billions of dollars, according to analysts.
In London, BP Chief Executive Bob Dudley, who took the helm from Tony Hayward after the spill, said ahead of the report's release BP was not the only party involved.
"We're certainly encouraging our partners, our other partners, to step up and meet some of the obligations from the accident," he told reporters at an industry event.
DANGER SIGNS MISSED
The Transocean report, which repeated many of the issues raised by U.S. government investigators, said BP failed to properly assess the risks around the troubled well and did not communicate the danger to Transocean.
BP also used a poor well design which led to the failure of cement around the well casing, allowing gas to escape and reach the rig, causing the explosion, the report said.
Transocean also said its blow-out preventer, a device designed as a last resort to close off a well, was properly maintained, but the extreme pressure from the well forced drill pipe to bend, preventing the shears from cutting the pipe.
Transocean workers did not see that gas was shooting up the well until too late, the report said.
BP has struck deals to cut its liability for the spill with partner Mitsui & Co, which will pay $1.1 billion toward the clean-up, and oilfield services company Weatherford International Ltd, which will pay $75 million.
It has said it is seeking deals with other partners in the well, including Anadarko Petroleum Corp, Transocean and Halliburton Co, to also contribute to clean-up costs.
Hundreds of spill-related lawsuits are expected to come to trial in February 2012.
U.S.-listed shares of Transocean rose 1.1 percent to $62.56 in early trading on the New York Stock Exchange, while BP shares were down 0.2 percent to 444.95 pence on the London Stock Exchange.
(Reporting by Matt Daily, additional reporting by Tom Bergin in London, editing by Gerald E. McCormick, John Wallace, Dave Zimmerman)
Posted by James at 19:52