Mexico Oil Spill: Bp Vs. Halliburton

Mexico oil Spill: BP vs. Halliburton

Introduction

The Gulf of Mexico oil spill is the biggest disaster of its kind in the history of the business world. Macondo well of BP blew out in Gulf of Mexico deep water. The blowout disaster is considered as more damaging than the Exxon Valdez spill and Ixtoc blowout in the coast of Mexico. Those crew members who were working at the drilling rig got injured, and eleven were killed. The livelihood of many workers was damaged including that of fisherman. Countless organisms and marine animals were killed. Many beaches and marches in Florida, Alabama, Mississippi and Louisiana were damaged. The media coverage around the world provided wide coverage to the damage and the disaster was eventually capped in July last year. Since the disaster, many lawsuits have been filed. Many hearings have taken place, and an investigation has been carried out by the US President. Congress has also taken note of the event (Griggs, 2011).

Quantifying of damages has begun since the occurrence of the disaster, however, it might take more time the settle these charges. According to the report, around 180 million gallons of oil, which is around 4.4 million barrels, was drained into the coast. Natural processes and clean-up efforts have helped in cleaning of water surface. However, it may take many decades before the impact of this disaster disappears for good. Media played a very crucial role in creating awareness and forcing the possible culprits to take necessary actions. Many vital questions include the role of authorities, the ability and conscience of companies, response mechanism and other factors. The most crucial question and one that has been highlighted most frequently is the impact of oil; spill on the ecosystem surrounding the Gulf of Mexico. It will take some time before this question can be proper answered. The purpose of this research papers is to study the effects of Oil Spill and to highlight the role of Halliburton in the disaster.

BP's Perspective

It took 87 days in sealing and closing the oil rig, which leaked millions of tons of hydrocarbons into the Gulf of Mexico. According to BP, the disaster occurred due to the loss of control of well's pressure and subsequent failure to prevent blowout or failure of blowout preventer. The functions of preventer failed after initial explosions. All these scenes led to the oil spill. However, the damage was already done, 11 workers died, and eco-system was damaged. According to the management of BP, the whole organization showed regret also recognized the overall damaged done not only to the worker and their families but the suffering of environment. BP promised the community that such disasters will not occur again. They have also taken responsibility of cleaning-up the mess and BP also plans to compensate all those who are affected by the mishap. BP claimed that they will look after the safety and health of residents and people, who are affected due to spill. By the end of December 2011, USD 17.7 billion is spent of the conservation activities. BP claimed, "Throughout, we have sought to work closely with the government, local residents, our shareholders, employees, the wider industry and the media" (Wri.org, 2010).

The Problem

According to BP, Halliburton has damaged the evidence of their involvement in Gulf of Mexico oil spill. While, BP is trying to control the damage, Halliburton is facing legal battle over the possible involvement in Mexico's Oil Spill.

Oil giant BP has accused oilfields services firm Halliburton of destroying damaging evidence relating to last year's oil well blast in the Gulf of Mexico in which 11 people were killed.

According to BP, around 11 people lost their lives due to an explosion in the Gulf of Mexico and Halliburton is engaged in hiding the evidence. Halliburton, the largest company in the global cementing business, was in charge of cementing the well. In order to prevent oil and natural leakage, rig workers pump cement down wells after finishing drilling. However, this process require a very particular type of cement. If the cement is flawed, it can crack or fail to set properly, allowing oil and gas to leak through. If gas escaped through the Gulf rig's cement, it could have "blowout" and ignited the fatal blast. Many leading experts speculate that a flew in this process could have caused the explosion. Halliburton was also responsible for cementing a well off the coast of Australia that blew, leaking oil for ten weeks before it was plugged.

BP claims that it was poor cementing from Halliburton's part, which lead to disaster. According to BP, during a hearing at New Orleans court, Halliburton had destroyed the results of the cement tests intentionally. However, the claims were denied by Halliburton calling it merit-less claims. Now the battle has begun of quality of cement. Now the legal battle has begun, and damage trials also begin in 2011. Both parties have engaged with lawyers, and there is an exchange of the allegation from both parties. BP has filed a case in court claiming that "destroyed records of testing, as well as, the physical cement samples used in the testing".

BP further argued that Halliburton has failed to provide modeling evidence. BP has asked for legal sanctions on claims of poor cement quality. However, these claims were rejected by BP. Moreover, Halliburton accused BP of Defamation and fraud during investigations. According to Halliburton, It was BP's management which, asked for last minute changes to quality of cement (Bergin, 2011).

The exchange of allegations continued till trial in February. There are many factors, which will be assessed during trials including quantification of damages.

A GAP Analysis

The Gap analysis will be conducted on the current efforts and results versus the desired efforts and results of conservation strategies, which are being applied in overcoming Gulf of Mexico Oil Spill. Once conducted, results of Gap analysis are used to provide a recommendation to the concern authorities in order to enhance the effectiveness of conservation activities. Analysis would include creating a clear boundary of current efforts and drawing new boundaries (desired outcomes), which are required according to researches. There are many ways in which it can be done including assessing the current data against desired data, using maps, land ownership, boundaries and other statistical tools (Maxted et.al, 2008).

Oil Spill

Figure 1: The Affected Area and Production