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The Blame Game Continues

Written By Brianna Panzica

Posted June 28, 2011

Fingers are still pointing left and right on the issue of the April 2010 Gulf of Mexico oil spill.

Last Wednesday, Transocean (NYSE: RIG) issued a report reviewing the causes of the oil spill, and all blame was aimed at BP (NYSE: BP).

Swiss-based Transocean owned and operated the oil rig that leaked over 4 million barrels of oil into the Gulf last spring.

The disaster, their report stated, was caused by a poor well design, the fault of BP.

BP made, according to the report, “5 different temporary abandonment plans”, the last of which was not properly reviewed and approved.

The well was also designed with poor cement, provided by Halliburton (NYSE: HAL), that could have been avoided had BP tested it properly.

BP had planned to get all members of the Deepwater Horizon project to contribute to the expenses of the disaster — costs totaling to around $41 billion including fines and cleanup expenses.

Weatherford International (NYSE: WFT) agreed to pay $75 million to BP to help cover the costs, and MOEX, a unit of Mitsui (PINK: MITSY), will pay $1.1 billion.

This stems from the belief that no one was solely to blame and that a number of factors contributed to the leak.

The Transocean report, however, could send other companies looking to take the same angle, avoiding the costs of the spill.

The report places very little responsibility on Transocean, assuring that its blowout protector was properly maintained, failing only because of the massive pressure.

However, an earlier report from the United States Coast Guard said that Transocean was in part to blame, lacking their own proper maintenance and training.

A spokesman from BP, Scott Dean, has told reporters that Transocean appears to have “cherry-picked the facts in support of its litigation strategy.”

When this report was released, Transocean went up 0.8% on the New York Stock Exchange, and BP fell 0.1% on the London Stock Exchange, according to Reuters.

That’s all for now,


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