BP's Report on Deepwater Horizon Explosion and Failed Well Leaves Questions

Questions are unanswered in BP's report on the explosion aboard Deepwater Horizon

By Nicholas Moroni

BP's release of a preliminary report on the events surrounding the April 20 explosion aboard the Deepwater Horizon that led to three months of spewing oil in the Gulf of Mexico, hints at a defensive role that the company will probably be playing as it faces investigations and litigation in the future.

"No single factor caused the Macondo well tragedy. Rather, a sequence of failures involving a number of different parties" caused the oil rig to explode and the oil spill in the gulf, BP stated in a press release today. In the aforementioned report, the oil giant names Transocean (which owned the Deepwater Horizon), Cameron International (the manufacturer of the failed blowout preventer) and Halliburton (accused of performing a shoddy job in pouring cement down the well: one that might have failed to stop firy oil and gas from rising to the surface and to cause the explosion), as responsible entities.

Similar to the blame game that was played recently in Houston at federal investigative hearings; mea culpas from entities linked to BP and the Deepwater Horizon were not forthcoming.

The Washington Post published the following statements in an article today:

• "It is evident that a series of events rather than a single mistake or failure led to the tragedy," said BP CEO Tony Hayward, who has been silent for months, and will step down from his post on October 1 - he will be taking a position in Russia, and will yield less power within the company. Bob Dudley will take over as CEO.
• "In both its design and construction, BP made a series of cost-saving decisions that increased risk - in some cases severly," read a statement from Transocean.
• "The well owner [BP] is responsible for designing the well program and any testing related to the well," Halliburton rebutted in a statement.

The report, which was presented at a press conference in Washington, D.C. today, failed to hold anyone in particular within BP responsible for the explosion.

The report did claim that the blowout did not rise from the sides of the well (an area known as the annulus); but, rather up the center - an indication that the company may dodge blame for operating with a cheaper casing that had been assessed as riskier, and going with a reduced number of centralizers (they keep the casing in place, and the company used).

BP will remain on the defensive as it stands to face billions of dollars in fines that could be imposd under the Clean Water Act and the Oil Pollution Act.

The Justice Dept. is already investigating BP, and the company is facing litigation from states and individual plaintiffs.

Gulf Coast Claims Facility Viewed Suspiciously

Ken Feinberg at a town hall meeting in Bayou La Batre, Ala.

(Photo by Bill Starling/Courtesy of Press-Register)

The Gulf Coast Claims Facility is being viewed suspiciously

By Nicholas Moroni

As attorney Ken Feinberg's Gulf Coast Claims Facility officially takes over the BP claims process on Monday, August 23, some have adopted a precarious view of the operation.

Fisherman, restaurant owners, distributors, hotel owners, and other entities are cautiosuly approaching the claims process. Many are uncertain that the initial emergency payments and a final settlement with BP - after which the right to sue is waved - will cover long term damages. The unfortunate reality, however, is that many spill victims cannot finance a potentially lengthy legal battle with BP and its affiliates; subsequently, some are uneasily taking the initial payments, but are not entirely committed to settling.

"The conern is you're going to have people essentially being taken advantage of because they have economic straits - they get quick, low settlements and out of economic necessity they take them, but in the long run they are not better off," Stephen J. Herman, a New Orleans lawyer, told The New York Times.

Throughout the past two months, Feinberg has toured the Gulf region conducting town hall meetings in an attempt to promote the $20 billion escrow account set up by BP in June, which will be used to compensate spill victims. At one meeting in July, he told a congregation that anyone with a legitimate claim that opts out of a settlement is "crazy."

There are other causes for concern. BP's business affiliates (Transocean, Cameron, Halliburton, and others) that were involved - directly, or indriectly - in the April 20 sinking of the Deepwater Horizon are shielded, so claimants cannot file suit following a settlement. What's more, spill victims that have been receiving emergency payments from BP, or fisherman that were hired to spot oil and lay booms thorugh BP's Vessel of Opportunity program, will have their wages deducted from any payment.