BP sues Halliburton, Transocean over oil spill and blast

By @ibtimes on

BP Plc has filed for damages totaling more than $80 billion from Halliburton and Transocean a year after the Gulf of Mexico rig explosion that killed 11 workers and spewed millions of barrels of oil into the sea.

Analysts said BP had little chance of winning the cases and was more likely trying to force the companies to settle. Experts said pursuing the lawsuits could further damage BP's reputation as well as reveal yet more embarrassing details of the way the disaster was handled.

BP's is seeking more than $42 billion in its suit against Halliburton, which cemented the blown-out well that caused the Gulf of Mexico oil spill. It is claiming a similar sum from rig owner Transocean.

It's got a fairly low chance of being successful, said one analyst who declined to be named because of the legal sensitivities around the case. I get the feeling that there is positioning going on here for a settlement.

BP said Halliburton concealed critical information which could have prevented the disaster.

BP did not give a figure for how much money it was seeking from Halliburton but asked for damages of up to the total cost of the spill, which BP has put at $42 billion, plus interest, legal costs and punitive damages.

Halliburton's improper conduct, errors and omissions, including fraud and concealment, caused and/or contributed to the Deepwater Horizon incident, BP said in a court filing.

Halliburton knew and understood it was misrepresenting material information, BP added.

The suit was filed on Wednesday, one year to the day after the Deepwater Horizon rig exploded, killing 11 men. On Wednesday, BP also filed a lawsuit against rig operator Transocean.

Transocean shares were off 6.2 percent, while BP shares traded flat at 0957 GMT, against a 0.3 percent rise in the STOXX Europe 600 Oil and Gas index.

Since the outset of the disaster, BP has sought to blame its contractors, namely Transocean -- a plan which PR experts said had damaged its image. The Presidential investigation into the report did criticize these companies but levied most of its criticism against BP.

Halliburton was not immediately available for comment on Thursday.

In January the company disputed a U.S. presidential commission's characterization of its cementing work on the blown-out Macondo well, saying that its report omitted key facts.

Service providers' contracts with operators usually provide indemnities against any environmental damage which may result from their work and one analyst said this limited BP's opportunities to recoup cash from Transocean or Halliburton.

If BP can establish gross or willful negligence on the part of the contractors, it may be able to void such indemnities but this is seen as hard to achieve.

I don't think it's built into peoples' expectations, said the second analyst, who also declined to be named due to the legal sensitivities.

BP was widely criticized for trying to shift blame onto Transocean during the crisis. President Barack Obama called the mudslinging between the companies a ridiculous spectacle.

Joseph Lampel, Professor of Strategy at Cass Business School said a lawsuit would be even more damaging to all the companies.

The lawyers may have go at each other. They will cross examine witnesses and they will dig into every detail imaginable. This kid of battle is not only fought in the court room but in the arena of public opinion, he said.

What we know about any corporate battle in court, is that it's rare for any side to come out better.

(Additional reporting by Sakthi Prasad in Bangalore; Editing by Mike Nesbit)

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