What BP says (and doesn’t say) in its report
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TEXT OF INTERVIEW
Kai Ryssdal: The executive summary of BP’s big report on the oil spill goes a little something like this: It’s complicated. The report lays out the details of just what happened in the Gulf of Mexico on April 20 when the Deepwater Horizon rig caught fire and 11 workers died.
Marketplace’s Eve Troeh is here to tell us what BP’s saying and not saying about the whole thing. Hey Eve.
Eve Troeh: Hi.
Ryssdal: So what did BP have to tell us in this report today?
Troeh: BP had a lot to say. They got more than 50 specialists together — many of those were from within the company. They started working on this report a few weeks after the spill; so they’ve been at it for months. And they came up with eight reasons — a mix of human and technical mistakes that led to this whole disaster. The story really starts with cement. They say that all this cement was poured down, and crews thought that things were OK, they started pumping water and mud in and out of the well. And then several hours later, up comes oil and gas and mud. Gets all over the rig, lights it on fire. Then, while the rig is on fire, the blowout preventer doesn’t work and that’s when all this oil starts flowing into the Gulf.
Ryssdal: There was no admission of guilt or blame or fault here from BP, was there?
Troeh: Well, a little bit. BP did write this report, and on many of these eight items, they said that they and someone else had something to do with it. But they’re not taking full responsibility by any means. They say, for instance, that the blowout preventer pretty much had nothing to do with them. And that was just hauled out of the water last week, so there will be a lot of investigating of that. They also pointed a finger to the cement, and that’s something that Halliburton made. They also point the finger at Transocean, that’s the company that actually owns the rig. So a lot of the workers were Transocean workers, and BP says, they didn’t react correctly when they did see signs of trouble. For instance, when that oil and gas started coming up, they should’ve made it shoot over the edge and not onto the rig itself.
BP does say that its own engineers misread a few tests. And they say from the get go, our report is the final word. These partner companies definitely agree with that. They’re not going to let BP throw them under the bus. In fact, TransOcean is already saying that this whole report is just to cover up BP’s faulty design of the well to begin with.
Ryssdal: Well, and it has to be read a little bit as BP trying to lay the groundwork for what will be and already are bunches of lawsuits.
Troeh: Yes, this is true. BP’s already facing lawsuits from individuals and from businesses. It could face lawsuits from states, there will be a federal investigation by the U.S. Justice Department. So if it can spread around this liability, it could owe less money in damages down the line.
Ryssdal: I’m gonna get a little bit wonky on you here and go to the bond the market: BP’s debt rating, it’s credit rating was actually upgraded today.
Troeh: Yes, it was. You know, congratulations to BP on their A! The ratings agency Fitch upgraded them from a BBB to an A. They got that BBB after the spill, that’s just a couple marks above a junk rating. And there are a few reasons they got this high mark today. One is that, you know, the well in the Gulf has been capped. So this creates a whole different scenario, where we can start really assessing what the liability scenarios will be. This report is part of that. So again, it comes back to knowing what will happen here, having a sense of what might happen. BP’s also been selling a ton of its assets, so it actually has some cash on hand to pay for all this mess, whatever it’s part in it might end up being.
Ryssdal: Marketplace’s Eve Troeh from the Sustainability Desk on BP’s 190-some-odd-page report today on that oil spill. Eve, thanks a lot.
Troeh: Thank you.
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