The Macondo Disaster: Why BP shouldn’t get all the blameI want to begin by saying this: I am in no w

The Macondo Disaster: Why BP shouldn’t get all the blameI want to begin by saying this: I am in no way trying to exempt BP from responsibility, there were many opportunities where this disaster could have been averted and if BP had not let standards slip there is a chance the rig would still be standing. However, when you mention the name ‘Macondo’ or mention the Gulf of Mexico oil spill, everybody frowns and says something derogatory about BP, they never seem to mention that Halliburton also had their part to play.So who was involved in the run up to the disaster? Firstly there’s Transocean, the owner of the rig in question. While the company saw their share price drop by over half in the aftermath of the disaster I’m yet to come across an article or report that attributes any of the blame to them. They leased the rig out to BP and that is about the end of their involvement. Much like if you rented a car, you would be responsible for the maintenance and operation of that vehicle while your name was on the lease and the car in your possession.Secondly we have BP. They were the operator of the field (in charge of all operations) and the company that had leased the rig from Transocean. As I mentioned in a previous post about the disaster (see here: http://on.fb.me/1bfxYKh) a series of poorly completed tasks and failings to adhere to proper practice by BP staff helped contribute to the disaster. It is only fair that they are proportioned some of the blame.Thirdly we have Halliburton, an American company and the second largest Oil Service Company in the world. Why is their nationality and status important? Well I will go on to speak about sums of money that most people see as inexplicably large but to such a prominent company are more or less peanuts. Their nationality is also important but for now we shall leave it be.Halliburton had been contracted by BP to drill and complete the well on the Macondo rig. A judge declared that the contract between the two companies indicated that all risk for the operations fell on BPs shoulders as the rig operator, and that they would be financially responsible.The cause of the disaster was a poor cement job. Once a well has been drilled, steel casing is put into the hole and cemented into position to stop the hole caving in and to give companies more control when extracting the hydrocarbons.Halliburton were in charge of that cement job, and it failed. BP employees then failed to test the cement job and soon after hydrocarbons started rushing into the hole, heralding disaster. The BOP (Blow-Out Preventer) was engaged and would usually have sealed the well by cutting through the casing and preventing any flow to the surface. However, due to the extreme pressures at the sea floor the well casing had buckled and the BOP was unable to cut through the metal and jammed, allowing oil to continue flowing to the surface. This buckling was an unknown phenomenon that was only highlighted after the disaster, so neither Halliburton, BP nor any other operator or service company in the gulf would have had any idea it had happened.The scandal really broke when it emerged that both BP and Halliburton knew that the cement was flawed. They knew that there was a chance that this cement could fail, and they knew it weeks in advance. Yet Halliburton still used the cement for the job and BP still failed to test the cement before flowing the well (allowing hydrocarbons to flow from the reservoir to the surface).When taken to court, Halliburton tried to push the blame for the accident onto BP by saying BP had ignored its advice when conducting the cement job. The service company had instructed the oil giant to use 21 stabilisers when cementing the well, as this would help the cement set properly and avoid any problems. BP ignored the advice and carried on with its planned number of 6.To attempt to prove BPs negligence Halliburton ran a simulation to see whether the use of 6 instead of 21 stabilisers had affected the cement jobs chances of success. The model results indicated that the decision to use 6 stabilisers had made no effect on the cement job’s integrity at all. Subsequently, Halliburton destroyed the model before it could be presented in court.Destroying evidence is obviously a criminal offence and the company was fined $200,000 (this is an insignificant amount to such a large company), was given three years of probation and promised to fully co-operate with the rest of the investigation.In the end Halliburton was only found to be 3% responsible for the disaster and the company’s conduct was found to not constitute gross negligence. The company was forced to pay $1.1billion dollars in settlement but that was it. In comparison, Transocean had to pay $1.4 billion (despite only having leased the rig) and BP, as of September 2014, paid out over $28 billion.To me it appears like BP has been unfairly burdened with more blame than it should have been. When the contract was brought to light claiming that BP would be responsible for any risk, I feel this was exploited and despite Halliburton’s clear involvement in the disaster the company managed to get away relatively scott free possibly due America protecting its own.So why does it matter? Well as of September 2014, Transocean’s shares were down 56%, BP’s down by 27% while Halliburton’s had doubled. In the last year, not only has the company acquired several smaller businesses it had also bought Baker Hughes, the fifth largest oil service company in the world. My worry is that the company now controls more operations than ever before, and without having faced a heavy rebuttal for its involvement in the Macondo disaster, may still cut corners in the future. If this is the case its only a matter of time until another rig explodes, more people are killed and more environments are spoiled.- WatsonImage Credit: Wiki Commons http://bit.ly/1bDsEANReferences:http://bit.ly/1ODOYfIhttp://bloom.bg/1EoBQmPFurther Reading:http://bit.ly/1bDoTLGhttp://on.ft.com/1EoBSLkhttp://bit.ly/N1vseP -- source link

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