What was Halliburton's role in US oil spill?

David Usborne
Sunday 30 May 2010 00:00
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Shares in Halliburton, the world's second-largest energy services company once headed by former US vice-president Dick Cheney, slid in trading on Friday, in part because of the new six-month moratorium on offshore drilling projects imposed last week by President Barack Obama.

But investors have had other reasons to feel concern for the fortunes of Halliburton. As the investigation into the BP oil rig explosion accelerates, new information has been surfacing in congressional hearings in Washington pointing to possible problems with the casings that were put around the bore hole in the sea bed and the cementing that is critical to sealing it up.

Halliburton did the cementing at the well, under contract to BP. It was to inject the cement to seal the casing in the bore hole to make any seepage of gas and oil impossible, and insert the cement plug that would have allowed BP to return at a later date to begin production. Last August, Halliburton was involved in the cementing of a well in the Timor Sea off the coast of Australia that similarly blew out, sending thousands of gallons into the ocean.

Even within days of the US tragedy, which left 11 men dead and unleashed the worst oil spill America has ever seen, investigators were focusing on the type of cement used – it had been infused with nitrogen – and tests that were done to ensure it had set properly. BP investigators told members of Congress that in the hours before the blast, a "fundamental mistake" may have been made in moving forward with placing the plug even when pressure tests had shown a "very large abnormality".

The notion that blame for the blast could eventually be put on Halliburton might be tempting for BP. Indeed, at early hearings, BP seemed to point fingers both at Halliburton and at Transocean, the owner of the rig, prompting a rebuke from President Obama.

From the start, Halliburton's lawyers have insisted that its men on the rig were simply following specifications and instructions from BP. In other words, if the cement does turn out to have been at least partly responsible for the tragedy, BP is "bound to hold Halliburton harmless", as one of the lawyers told Congress last week. Transocean has made a similar case that as the owner of the lease on the well, BP must be ultimately responsible.

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