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Despite findings of a federal investigation highlighting Haliburton Co.’s alleged role in the BP oil spill in April, the company will likely avoid additional liability in the accident, according to analysts and legal experts.
Haliburton Co., a product and service provider to the energy industry, came under scrutiny for a well-cementing job the company performed at the Macondo well that exploded in the Gulf of Mexico, killing 11.
While the findings caused stocks to drop Thursday, Haliburton’s contract with BP on the project offer it broad protections, said analysts and legal experts. The National Oil Spill Commissions findings also leave room for doubt as to whether the company did anything wrong.
''It certainly implicates Halliburton more in public opinion, but not in terms of absolute liability,'' said Kent Moors, a professor at the Graduate Center for Social and Public Policy at Duquesne University in Pittsburgh and president of ASIDA, an international oil and gas consulting firm.
''The commission’s findings may be more damaging to BP than to Haliburton due to the fact that it may show BP’s oversight of the project,'' Moors said.
''In a relationship like this, the operator has to call the shots, and the operating company, BP, essentially dropped the ball on this,'' he said.
On Thursday, the White House-appointed spill commission said ''Halliburton scientists were aware of problems with the cement mix used to seal the Macondo well weeks before the April 20 blowout that launched the nation's worst oil spill.''
''Only one of four company lab tests conducted in February and April showed the mixture would be stable – results that may not have been available when the cement was pumped into the well,'' according to a letter by Fred Bartlit, head of the commission's investigative team.
''A similar foam-injected mix tested in labs by Chevron Corp. scientists also found the mixture to be unstable,'' he wrote.
The findings seemed to reinforce BP's claim that a faulty cement job by Halliburton enabled volatile gas to escape up the 13,000-foot well and ignite on board the Deepwater Horizon drilling rig.
The report sent shares down 8% on Thursday. The stock recovered slightly Friday to $31.86, up 18 cents.
Late Thursday night, Halliburton responded with a detailed statement questioning many of the commission’s findings, saying that scientists may not have been able to prove the cement mix was stable because they tested a mixture of off-the-shelf materials rather than the unique blend of cement and additives on the rig before the accident.
On Wednesday, a federal judge in New Orleas ordered Halliburton to submit actual cement samples used in the Macondo well to federal investigators with the Coast Guard and the Department of the Interior.
Halliburton also said the commission mischaracterized its four internal tests of the cement mix. ''The two in February were preliminary because final well conditions were not yet known, while a third test in April was declared irrelevant because of a lab error. The last test showed stability, but the blend then was altered at the instruction of BP and the new blend not fully tested,'' the company said.
Halliburton said BP may have been able to detect potential problems with the cement even after it was in the well if it had performed a widely used cement bond log test to confirm its integrity, and if rig personnel had properly interpreted the results of another crucial test. That might have prompted crews to take remedial action.
Halliburton also restated criticisms of BP's well design, saying it provided ''fewer barriers to block gas flow than another design common in the Gulf.''
''However, even if all the commission's findings prove true, Halliburton has strong provisions in its contract with BP on the project that protect it from liability in an accident,'' said Jeffrey Spittel, ''an oil field services analyst at Madison Williams in Houston. He continues to advise investors to buy the stock.''
''The contract indemnity could change only if Halliburton were deemed grossly negligent in performing its work, but the commission's findings do not appear to rise to that level,'' said John Zavitsanos, an oil and gas litigator and partner at Ahmad, Zavitsanos & Anaipakos in Houston,
''I did not see anything in there that indicates that the indemnity is going to be affected in any way,'' Zavitsanos said.