Halliburton cement could be at fault for Gulf oil spill
The Halliburton building in Houston, Tex.
TEXT OF INTERVIEW
JEREMY HOBSON: Maybe BP isn't entirely at fault for the spill in the Gulf. From American Public Media in Los Angeles, good morning, I'm Jeremy Hobson. That word is according to a panel appointed by President Obama to investigate the oil spill. The panel's chief investigator now says the contractor Halliburton was aware the cement mix it was using on the well was unstable. Overseas investors have been buying shares of BP today on that news.
Marketplace's Stephen Beard joins us live from London with more. Good morning.
STEPHEN BEARD: Hello, Jeremy.
HOBSON: Why do investors seem to think this is good news for BP?
BEARD: Well, because it's the first concrete side -- if I can use that phrase -- that BP might not be solely to blame for the disaster. Here's Nick MacGregor, an oil analyst with stockbroker Redmayne Bentley.
NICK MACGREGOR: Well, this is the first independent confirmation we've had of BP's view that some of the contractors involved shared liability for the chain of events that led up to the blow out in the Gulf of Mexico. And financially this may well mean that they are now able to involve those parties in paying the bill for all of this.
But BP is certainly not off the hook. Indeed the U.S. commissions chief investigator claims that BP was also aware that the cement used on the well was unstable. And it's worth noting that after an initial burst of euphoria this morning, BP's share price has drifted back a little.
HOBSON: OK so BP's share prices have been up and down. What does all this mean for Halliburton? How is this going to affect them?
BEARD: Well it's not good news for Halliburton. Indeed its share price plunged yesterday and the cost of insuring its debt soared. Now these are still very early days. The commission doesn't report until next year. We still don't know for sure that the cement job was the main cause of the disaster. Halliburton's released a statement yesterday repeating its insistence that it was well design that was at fault. But one thing is clear -- contractors like Halliburton don't have anything like the deep pockets of BP. And it's probably safe to say now that if anyone does go bust over this, it won't be the British oil giant.
HOBSON: Marketplace's Stephen Beard in London, thanks.
BEARD: OK, Jeremy.