(RIG) Transocean: Blame it on BP!

In an internal investigation report, drilling contractor Transocean Ltd (RIG) – the owner and operator of Deepwater Horizon oil rig at the heart of the Gulf of Mexico (GoM) disaster – has accused British energy giant BP plc (BP) of decisions that led to the biggest environmental disaster in U.S. history.

As a reminder, on April 20, 2010, offshore driller Transocean’s ultra-deepwater Horizon drilling platform, contracted to BP, sank following an explosion while operating in the U.S. Gulf of Mexico off the coast of Louisiana.

The incident killed 11 workers and spewed more than 200 million gallons of crude in what is touted as the worst oil spill in U.S. history. Subsequently, a moratorium was imposed on offshore drilling at water depths of more than 500 feet in the region, which was lifted on October 12, 2010.

The report issued by Transocean alleges that BP – the owner of the Macondo well with a 65% interest – was squarely to blame for the oil spill, as the root causes of the explosion were tied to the London-based group’s ‘poor’ design of the well. BP overlooked risks associated with the troubled Macondo well and did not communicate the danger, alleges Transocean.

The offshore driller’s findings added that BP’s technically complex and poorly designed ‘production casings’ left little margin for error, while the cement used to create the structure was not adequately tested at all.

Transocean’s report goes on to say that BP, together with Halliburton Co. (HAL), another contractor, was to be blamed for the ‘poor cement job’ that allowed the oil/gas to burst through the reservoir and reach the rig, causing the explosion.

In a similar report commissioned by BP in September, the company blamed the disaster on a series of lapses by multiple parties, specifically hitting out at Transocean, accusing that every bit of safety system/device and well control procedure on the rig failed, and has therefore asked for $40 billion in damages.

Separately, BP also accused Cameron International Corp. (CAM) – the maker of a critical safety device called ‘blowout preventer’ – of designing and building a faulty piece of equipment and negligently maintaining it, which then failed to properly operate when required.

Now, with Transocean seeking to shift the accusation back to its employer, the legal battle over who is to blame for the accident gets more intense. According to reports, a federal trial is scheduled for next year to assess the degree of fault and the quantum of liability that lies with the companies.

BP PLC (BP): Free Stock Analysis Report

CAMERON INTL (CAM): Free Stock Analysis Report

HALLIBURTON CO (HAL): Free Stock Analysis Report

TRANSOCEAN LTD (RIG): Free Stock Analysis Report

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