Halliburton plea may help BP in spill liability battle
By Braden Reddall and Mica Rosenberg
(Reuters) - BP Plc appeared to gain an edge in the battle over liability for the 2010 Gulf of Mexico spill on Friday, after Halliburton abandoned one of its arguments that tried to paint the British oil company as unconcerned about well safety.
Halliburton, which did the cementing work for BP's well, on Thursday pleaded guilty to destroying evidence of internal tests it conducted showing there was no difference between the effectiveness of putting six or 21 casing centralizers on the well.
Centralizers help stabilize the well bore during cementing and, prior to the settlement with the U.S. Department of Justice, Halliburton had sought in court proceedings to pin blame on BP for the blowout because of its decision to save "time and money" by using only six centralizers.
A payment of just $200,000 to the Department of Justice ends the DOJ's case against Halliburton. At the same time, the plea seems to hurt Halliburton as it seeks to settle its share of private claims over the disaster, currently estimated at $1.3 billion.
John Coffee of Columbia Law School said it would now be less plausible for Halliburton to argue in any litigation between the two companies that it had warned BP about something for which the evidence was destroyed.
"This is a zero sum game between BP and Halliburton, particularly when it undercuts (Halliburton's) argument they had an honest theory of why the cement wouldn't hold," Coffee said. "If it's an honest theory, why would you destroy all the evidence?"
Nonetheless, Halliburton shares rose nearly 4 percent on Friday, since its plea announcement late on Thursday coincided with it unveiling a $3.3 billion share buyback.
Scott Gruber, analyst at Bernstein Research, said the company appeared more confident its oil spill liability was manageable in making a repurchase offer that would represent 8 percent of its outstanding shares at current prices. Continued...