Lawsuits fly in BP's Gulf spill blame game

Response crews battle flames on the Deepwater Horizon, off Louisiana, April 21, 2010.

Credit: Reuters/U.S. Coast GuardBy Tom Bergin

LONDON | Thu Apr 21, 2011 9:50am EDT

LONDON (Reuters) - BP and its partners involved in the Gulf of Mexico oil spill have unleashed a $100 billion-plus barrage of legal claims a year after the rig blast killed 11 workers and created an environmental disaster.

On the anniversary of the disaster, BP filed suits totaling more than $80 billion against Transocean and Halliburton.

And in a separate action on Wednesday, BP sued Cameron International Corp, the maker of the blowout preventer, the so-called fail-safe device that failed to automatically shut down the well.

BP is seeking up to the full cost of the disaster -- estimated at $42 billion -- plus costs, interest and punitive damages from each of the companies which helped it drill the doomed well.

Meanwhile, BP's partners in the well, Anadarko and Mitsui filed a lawsuit against it, challenging BP's demands that they contribute to the cost of the clean-up effort.

Wednesday was the deadline -- one year after the disaster -- for companies connected to the spill to file claims against each other.

Analysts said the companies probably did not want the cases to ever get to court, as this would lead to a spectacle which would only further damage their already battered images.

Instead, the suits were seen as tactical moves ahead of settlements that could see some of the burden shared. The litigation is expected to last for years.

"It's got a fairly low chance of being successful," said one analyst who declined to be named because of the legal sensitivities around the case. "I get the feeling that there is positioning going on here for a settlement."

So far, BP has met the full cost of the clean up effort alone and is paying compensatory damages to affected people in the Gulf.

At 1216 GMT, Transocean shares were off 4.6 percent, while BP shares traded flat, against a 0.5 percent rise in the STOXX Europe 600 Oil and Gas index.

FRAUD ALLEGATION

BP said Halliburton concealed critical information which could have prevented the disaster.

"Halliburton's improper conduct, errors and omissions, including fraud and concealment, caused and/or contributed to the Deepwater Horizon incident," BP said in a court filing.

"Halliburton knew and understood it was misrepresenting material information," BP added.

The nature of Halliburton's claims against BP was unclear. In an emailed statement Halliburton said: "We will vigorously defend these claims."

In January the company disputed a U.S. presidential commission's characterization of its cementing work on the blown-out Macondo well, saying that the report omitted key facts.

On Wednesday, BP also filed a lawsuit against rig operator Transocean.

Since the outset of the disaster, BP has sought to blame its contractors, namely Transocean -- a move which PR experts said had damaged its image. The Presidential investigation into the report did criticize these companies but directed most of its criticism at BP.

Service providers' contracts with operators usually provide indemnities against any environmental damage which may result from their work and one analyst said this limited BP's opportunities to recoup cash from Transocean or Halliburton.

If BP can establish gross or willful negligence on the part of the contractors, it may be able to void such indemnities but this is seen as hard to achieve.

"I don't think it's built into peoples' expectations," said the second analyst, who also declined to be named due to the legal sensitivities.

BP was widely criticized for trying to shift blame onto Transocean during the crisis. President Barack Obama called the mudslinging between the companies a "ridiculous spectacle."

Joseph Lampel, Professor of Strategy at Cass Business School said a lawsuit would be even more damaging to all the companies.

"The lawyers may have a go at each other. They will cross-examine witnesses and they will dig into every detail imaginable. This kind of battle is not only fought in the court room but in the arena of public opinion," he said.

"What we know about any corporate battle in court, is that it's rare for any side to come out better."

(Additional reporting by Sakthi Prasad in Bangalore and Matt Daily in New York; Editing by Mike Nesbit)

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Obama's oil spill chief reflects a year later

Adm. Thad Allen (Ret.), national incident commander for the Gulf Oil Spill, testifies at the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling hearing on ''the response to the BP Deepwater Horizon oil spill, environmental impacts, and approaches to restoration'' in Washington, September 27, 2010.

Credit: Reuters/Hyungwon KangBy Chris Baltimore

HOUSTON | Sat Apr 16, 2011 10:27am EDT

HOUSTON (Reuters) - The man the Obama administration chose to lead the fight against the worst offshore oil spill in U.S. history gave BP Plc credit for capping its stricken well but criticized its shoreline cleanup efforts.

Retired Coast Guard Admiral Thad Allen was the face of the federal government's response to the disaster, which held the world's attention during the 87 days that London-based BP's mile-deep Macondo well spewed more than 4 million barrels of oil into the Gulf of Mexico.

It all began on April 20, 2010, when an explosion aboard the Deepwater Horizon drilling rig killed 11 workers and unleashed a torrent of oil that fouled the shorelines of four Gulf Coast states.

At the height of the disaster Allen was in charge of the 47,000 workers and 7,000 ships that swarmed the Gulf Coast in the cleanup campaign. Nearly a year later the cleanup continues but Allen is back in retirement.

"Everyone wants to know, was there a sole cause, who's accountable, who's responsible for what happened," Allen told Reuters in an interview on Friday. "In my view there is just no simplistic answer here."

Even though there were several bungled attempts to cap the well over almost three months, Allen said BP's best work was done at the well site, off the Louisiana coast.

"Frankly, when I look at BP's effectiveness, they were more effective the closer they got to the well and they were probably less effective the further they got away from it," he said.

Allen criticized BP for fumbling in its efforts to mobilize a small army of contractors and sub-contractors who were charged with cleaning up the oil from the sensitive marshlands of Louisiana to the gleaming beaches of Florida.

"What they didn't realize was that was the lens by which the public evaluated the response," he said. "It's very hard to outsource core values -- compassion and empathy -- to a contractor."

The fate of the oil that gushed into the ocean is still "a huge question," Allen said. "We need a very robust research effort over the next several years to really understand the fate of the oil in the water."

Over "working dinners," Allen said he got to know BP's gaffe-prone chief executive Tony Hayward and Bob Dudley, the American who took his place.

"They were both professional, they were both responsive," Allen said. "When I asked them a question I got an answer."

Allen declined to directly criticize Hayward or Dudley but he did remark on some candid utterances that eventually led BP's board of directors to dismiss Hayward.

Hayward was pilloried in the United States for complaining he wanted his "life back" weeks after the deadly rig explosion.

"Obviously Tony Hayward on a couple of occasions revealed some personal opinions about what was going on," Allen said. "Senior leaders aren't allowed that luxury."

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