Transocean report pins oil spill blame on BP

NEW YORK Wed Jun 22, 2011 3:32pm EDT

Oil floats on the surface of the Gulf of Mexico around the Transocean Development Driller III, which is drilling a relief well, at the site of the Deepwater Horizon oil spill in the Gulf of Mexico June 2, 2010. REUTERS/Sean Gardner

Oil floats on the surface of the Gulf of Mexico around the Transocean Development Driller III, which is drilling a relief well, at the site of the Deepwater Horizon oil spill in the Gulf of Mexico June 2, 2010.

Credit: Reuters/Sean Gardner

NEW YORK (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.

In a statement, BP said the Transocean findings "cherry-picked" facts and ignored the company's lapses that were identified in two previous government reports.

"Unlike BP, which has stepped up to its responsibilities and cooperated with all official investigations regarding the accident, Transocean continues to take every opportunity to avoid its responsibilities," BP said.

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 were up 0.8 percent at $62.38 on the New York Stock Exchange, while BP shares closed down 0.1 percent to 442 pence on the London Stock Exchange.

(Reporting by Matt Daily, additional reporting by Moira Herbst in New York and Tom Bergin in London, editing by Gerald E. McCormick, John Wallace, Dave Zimmerman)

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Comments (1)
neilc23 wrote:
The Reuters report clearly demonstrates the failures and biases of major news agencies.

A more accurate report was published today by the Wall Street Journal in which it cites the two government conclusions, which are:

“Meanwhile, in April, an investigation by the U.S. Coast Guard offered a damning critique of Transocean, saying improper maintenance, insufficient staff training and badly designed safety systems contributed to the deadly explosion. The company had disputed the report, and claimed documentary evidence in the Coast Guard’s possession refuted key findings in their report.

Similarly, a U.S. presidential commission’s report in January reduced the likelihood that BP would be found guilty of gross negligence. That report criticized Transocean for failing to communicate to its crew lessons from an earlier near-miss in the North Sea that was “eerily similar” to the Gulf of Mexico blowout.”

I would have added to the report that the United States government refused immediate aid from the Netherlands and Great Britain, which would have significantly prevented much of the environmental damage. Even former President Clinton said the the federal government should have accepted the aid immediately and not wait for more than a month.

Jun 22, 2011 9:09am EDT  --  Report as abuse
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