Panel on BP Gulf Oil Disaster Could Shape Liability Issues

By | November 8, 2010

The White House oil spill commission will delve into the root causes of the BP offshore drilling disaster at a meeting Monday that may have liability ramifications for the companies that continue to point the finger at each other for the spill.

In preparation for Monday’s meeting, the panel’s chief counsel Fred Bartlit released a stinging report last month that said Halliburton used flawed cement in BP’s doomed Macondo well.

While the report did not absolve BP of blame, its sharp criticism of Halliburton’s cementing job sent the company’s stock down as much at 16 percent.

Barlit will offer more details on Monday about his initial findings on the origins of the April 20 explosion on the Deepwater Horizon rig that ruptured BP’s underwater well, unleashing millions of barrels of oil into the Gulf of Mexico over the summer.

Representatives from BP and Halliburton, as well as Transocean Ltd, the owner of the Deepwater Horizon rig, will also present their perspectives on the events that led to the largest offshore drilling spill in U.S. history.

In the past, BP has accused Halliburton of using an unstable cement design and said Transocean failed to test the automatic shut-off function on the blowout preventer before it was used on the rig.

Transocean has denied these charges and said BP’s well design was a key factor in the accident. Halliburton has also defended its cement work on the well, and blamed other actions for causing the explosion.

Created by President Barack Obama in the aftermath of drilling accident, the seven-member commission is ultimately charged with developing proposals to prevent and respond to major spills in the future.

The panel’s two-day session this week will also explore offshore drilling regulation, with a presentation from the head of the Interior Department’s drilling agency Michael Bromwich on Tuesday.

Marvin Odum, president of Shell Oil Company , and Rex Tillerson, chief executive of Exxon Mobil, will also appear before the panel on Tuesday to discuss industry safety culture.

(Editing by Russell Blinch and Marguerita Choy)

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