BP should write a $10 billion check for Gulf cleanup. Halliburton should write the next one

[NNN0LHI]

Then to be fair its Transoceans' turn to write one. Then if that isn't enough we go back to BP. That way we don't put one of them out of business and get nothing.

This is the route we should be going.

Don

--------------------------------

http://www.businessweek.com/news/2010-05-10/bp-halliburton-transocean-blame-each-other-in-gulf-oil-spill.html

BP, Halliburton, Transocean Blame Each Other in Gulf Oil Spill

May 10, 2010, 8:24 PM EDT

By Jim Efstathiou Jr.

May 10 (Bloomberg) -- BP Plc and contractors Transocean Ltd. and Halliburton Co. are singling out each other for responsibility after the explosion of the Deepwater Horizon rig in the Gulf of Mexico.

“Transocean’s blowout preventer failed to operate,” Lamar McKay, chairman of BP America Inc., said in testimony prepared for a Senate Energy Committee hearing today. Executives representing Transocean, owner of the Deepwater Horizon rig that exploded on April 20, and Halliburton, which provided cement for the oil well, will say BP had the lead decision-making role.

The hearing will be the first examination by Congress of the oil-well blowup. The $365 million Deepwater Horizon rig about 130 miles (209 kilometers) southeast of New Orleans exploded on April 20 and sank two days later. Eleven crew members are missing and presumed dead while the well is leaking an estimated 5,000 barrels of oil a day. The witnesses pledged to cooperate in determining the cause of the spill.

“We intend to do everything within our power to bring this well under control, to mitigate the environmental impact of the spill and to address economic claims in a responsible manner,” McKay said in his testimony.

Halliburton was “contractually bound,” to follow BP’s instructions, Tim Probert, president of global business lines for the Houston-based energy services company, will tell the panel.

[Stuart G]

1. Got some bad news for ya....10 Billion won't be enuf...nt

[Dogmudgeon]

2. The damage is likely to be in the *trillions*

It's difficult for anyone, even with cynical rage and sarcasm, to fully appreciate the magnitude of this disaster, and the risk of how much worse it could get.

BP, Transocean and Halliburton will all be in receivership by the end of the year, and they will be little more than fingernail scrapings compared to the total damage.

--d!

[Knight Hawk]

3. Possibly Bad News

BP has 8 billion cash on hand.If the British government does not save them,one in 7 pensioners in Great Britain gets dividends from BP,the US taxpayer is going to pick up the tab .It depends on several factors including how bad the damage is going to be.

[Blue-Jay]

4. Too cheap. They need to pay for ALL of it.

10B barely covers anything.

[Kringle]

5. BP is 100 % liable, not Halliburton .nt

[dipsydoodle]

6. BP is not 100% liable

Aside from the aspects of Hallibuton and Transocean they're actually 65% liable. Anadarko, a US company, is a 25% stakeholder and Japan's Mitsui has the remaining 10%. This has already been pointed elsewhere on DU over the past week or so.

[Kringle]

8. who held the lease? .nt

[dipsydoodle]

9. Jointly owned

see above. Search if you don't believe me for any reason. That's how I found out.

[TexasObserver]

12. You fail to comprehend joint and several liability.

Ownership percentages are not the same as liability percentages, so stop telling people they are.

[TexasObserver]

7. A tort can have more than one tortfeasor. Joint and Several liability.

Transocean, Halliburton, and BP could all be liable and probably are.

[dipsydoodle]

10. You missed out

Anadarko, a US company, who is a 25% stakeholder and Japan's Mitsui has the remaining 10%.

BP is 65% liable and that's aside from claims against Transocean and Halliburton.

The main point is that regardless of how much the issue is discussed here and in the blogs by barrack room lawyers nobody will know exactly what's what until a court of law decides.

[TexasObserver]

11. No, I didn't. You did. It's exactly as I stated it.

Liability is determined irrespective of ownership. You're confused because you don't know that ownership percentages do not equal liability percentages. Anadarko and Mitsui could be held entirely blameless, for example. They could get findings that they are entitled to 100% indemnity by BP and others.

Liability is not yet determined. It will be determined in a court of the law - a federal court, just like the ones in which I've successfully sued several major oil companies.

It will likely be litigated in one of the courts in which I have litigated, right here in Houston, at the federal courthouse. Of course, it could happen in Louisiana, but BP will probably file their bankruptcy petition in Houston. I expect that to happen by next summer.

[Statistical]

13. Analyst estimate anadarko liability to be 5B to 12.5B

http://www.washingtonexaminer.com/economy/analyst-cuts-target-for-anadarko-stock-estimates-companys-oil-spill-liability-5b-to-125b-95435584.html

The idea that BP will be left holding the whole bag is just silly.

[TexasObserver]

14. percentages of ownership do not equal percentages of liability, no matter how confused you about it

Anadarko has a contractual ownership position. They may or may have to pay a proportionate share of the damages. I'm not going to waste hours explaining to you how ultimate liability is determined in trial, but it isn't simply applying ownership percentages.

I don't know what the agreements between BP and others say, and neither do you, and neither do the "analysts." Are these the analysts who told you $52 a share was a good buy April 30th?

I've never suggested BP would pay the entire amount. That's something you've inferred that isn't present in anything I've said. There's a huge difference between liability findings and how much someone pays. There may be certain losses that BP passes through to Anadarko and others that Anadarko is able to require BP to pay. Trial findings of liability against a party do not mean that party must pay that amount. If there are contractual provisions for one party to indemnify another party (which there undoubtedly will be), those provisions may pass liability back to another party.

This will be a very complex case, and no one knows how it will come out right now, because we don't know if BP or any of the others mentioned will file for bankruptcy. And if they do, we don't know what impact that will have how much each participant pays. We cannot know it.

What we can know is this: percentages of ownership do not equal percentages of liability, no matter how confused you are on that point.

[JackRiddler]

15. Start at complete expropriation to have any chance of meeting the costs...

$100 billion is a more sensible retainer than $10 billion.

Not another penny should be wasted on oil exploration.

All capital possible must be put into developing and implementing the alternatives.

[Cresent City Kid]

16. You know the old sitcom gag?

The one where the husband pulls out his wallet to give the wife some money, and the wife takes the wallet giving the husband a dollar back?

Something like this won't happen, but if we're talking about what should happen, we should just take whatever they have, cash, ships equipment, etc., and throw them back some change if there's anything left.