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Commish: Poor Management That Caused BP Oil Spill Is Industry-Wide

Rachel Slajda | January 6, 2011, 9:43AM

Transocean Deepwater Horizon drilling platform sinks during Gulf Oil Spill Disaster

The Deepwater Horizon blowout that lead to the worst oil spill in U.S. history was caused by poor management -- poor management that, according to the presidential Oil Spill Commission, is industry-wide.

The commission, which has released some of its findings on the causes of the blowout, says the blowout could have been prevented by better management by BP and its partners, Halliburton and Transocean.

"The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again," the report reads. "Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur."

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Topics: BP, Gulf Coast Oil Spill, Halliburton, Oil Spill Commission, TransOcean LTD.

Gulf Coast Oil Spill

Investigator: Halliburton Knew Macondo Cement Was Unstable Before The Spill

Rachel Slajda | October 28, 2010, 3:04PM

An explosion at the Deepwater Horizon oil rig

The lead investigator for the presidential commission on the BP oil spill said today that Halliburton, and possibly BP, appears to have known the cement it was using in the Macondo well was unstable.

In a letter to the commission (PDF), Fred Bartlit wrote that Halliburton had conducted four lab tests of the formula for the cement. Two tests in February showed the slurry would be unstable, and Halliburton apparently gave the results of one of those tests to BP. Another test in April also showed it would be unstable; those results weren't shared with BP, Bartlit wrote. A fourth test, also in April showed the cement would be stable. But, Bartlit writes, "Halliburton may not have had -- and BP did not have -- the results of that test before the evening of April 19," when rig workers began pumping the cement into the Macondo well. The well blew on April 20.

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Topics: BP, Gulf Coast Oil Spill, Halliburton

BP

Feds To Focus On Oil Co's, Gov't Regulators In Criminal Probe

Rachel Slajda | July 28, 2010, 11:29AM

Oil from the Deepwater Horizon disaster washes ashore in Louisiana

The federal criminal investigation into the Gulf oil spill will focus on BP, Transocean and Halliburton -- and their connections to federal regulators.

The Washington Post reports today that investigators known as the "BP Squad," including people from the EPA, the Coast Guard, the FBI and other agencies, are assembling in New Orleans. They'll investigate not only the oil companies, but the role the former Minerals Management Service may have played in the disaster.

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Topics: BP, Deepwater Horizon, Gulf Coast Oil Spill, Halliburton, Minerals Management Service, TransOcean LTD.

Gulf Coast Oil Spill

Oil Execs To Face Senate For First Spill Hearings Tuesday

Justin Elliott | May 10, 2010, 6:23PM

Oil from the Deepwater Horizon rig

On Tuesday officials from some of the major companies involved in the Gulf oil spill will face senators for the first in a long series of congressional hearings.

First up, at 10 a.m. ET, the presidents of BP and Transocean, the rig owner, as well as a top official with cementing services provider Halliburton, will appear before the Senate Committee on Energy and Natural Resources.

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Topics: BP, Barbara Boxer, Gulf Coast Oil Spill, Halliburton, Henry Waxman, Jeff Bingaman, TransOcean LTD.

Gulf Coast Oil Spill

Halliburton Role On Oil Rig Puts Firm Under Scrutiny Once Again

Justin Elliott | May 5, 2010, 11:16AM

The Deepwater Horizon oil rig on fire before it sank, and a sign at a Halliburton plant (inset)

Halliburton is back.

The Houston energy services giant once led by Dick Cheney became the corporate bête noire of the Bush years as one of the biggest (and most troubled) Iraq War contractors. But the company had largely faded from public view since President Obama entered office -- until now.

As the provider of crucial cementing services on the oil rig that exploded and set off the massive spill in the Gulf, Halliburton finds itself under scrutiny once again.

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Topics: BP, Deepwater Horizon, Dick Cheney, Gulf Coast Oil Spill, Halliburton, Henry Waxman, Minerals Management Service, TransOcean LTD.

BP

Paying For The Oil Spill: A Guide To Who's On The Hook

Justin Elliott | May 4, 2010, 2:15PM

The Deepwater Horizon rig burning before it sank

There are two broad categories of costs associated with the catastrophic BP Gulf oil spill: one is cleanup; the other is damage caused by the oil -- to shoreline property, local tax revenues, the fishing and tourism industries, and other businesses and individuals.

Here's a guide to who's on the hook for which costs.

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Topics: BP, British Petroleum, Deepwater Horizon, Gulf Coast Oil Spill, Halliburton, Obama Administration, Oil, Oil spill, TransOcean LTD.

Halliburton Accused of Accounting Irregularities

Spencer Ackerman | June 21, 2007, 4:35PM

Last year, Halliburton lost billions of dollars of revenue with the U.S. Army discontinued a worldwide supply contract with the oil-and-defense-services company. Yet Halliburton continues to report massive profits. What gives? A new reported column by Bloomberg's Jonathan Weil proposes an answer: Halliburton may be cooking its books.

Through a Freedom of Information Act request, Weil got ahold of court papers filed by Halliburton's former director of technical accounting research and training, Anthony Menendez, who alleges that Halliburton reported "billions" of revenue from sales before the sales ever happened. For good measure, according to Menendez's court filings with an administrative-law judge for the Department of Labor in Louisiana, Halliburton retaliated against him after he went to the Security and Exchange Commission with his concerns last year.

Menendez described Halliburton's "bill and sale" practices like this:

"For example, the company recognizes revenue when the goods are parked in company warehouses, rather than delivered to the customer. Typically, these goods are not even assembled and ready for the customer. Furthermore, it is unknown as to when the goods will be ultimately assembled, tested, delivered to the customer and, finally, used by the company to perform the required oilfield services for the customer.''
If true, that would violate generally accepted accounting principles. For companies to recognize revenue before delivery, ``the risks of ownership must have passed to the buyer,'' the SEC's staff wrote in a 2003 accounting bulletin. There also ``must be a fixed schedule for delivery of the goods,'' and the product ``must be complete and ready for shipment,'' among other things.

Charles Mulford, a Georgia Institute of Technology accounting professor, reviewed Menendez's complaint for Weil. "I'm not using the 'fraud' word yet," he tells TPMmuckraker, but Menendez's allegations about Halliburton's bill-and-sale practices are "not in accordance with generally accepted accounting procedures."

You can read Menendez's complaint in three parts (I, II, III).