BP Vs Haliburton

[Pondlife]

BP signed a contract that they would be entirely responsible for consequential damage caused by any subcontractors. Instead of sitting back on his yacht, and maximising profits, the BP boss should have spent some money in overseeing the operation.

BP will lose the case.

It may well be the case that BP are responsible for consequential damage, hence them stumping up the $14B so far and having to set aside the additional $20B.

That doesn't mean they cannot reclaim this money from negligent suppliers does it?

[Pondlife]

BP has certainly got contracts with suppliers which they can use to claim damages, but I doubt they'll be able to reclaim anywhere near $34 bln - for this sort of money the court case can last for next 10 years easily.

What suprises me is that with all that work done by 3rd parties that thing was even called BP - which part of the job BP is doing these days - financing and putting them all together? Outsourcing has reached such levels for cost cutting reasons and to allow plausible deniability to the main company. It might just not work this time.

BP were awarded the drilling rights, therefore it's their gig.

How they get the stuff out of the ground is probably up to them.

[AtW]

That doesn't mean they cannot reclaim this money from negligent suppliers does it?

Depends on a contract.

"Halliburton had asked a court to force BP to recognise a contractual agreement protecting it against possible clean-up costs"

Source: BP sues Halliburton for Deepwater Horizon oil spill clean-up costs | Business | The Guardian

It seems very unlikely BP will get more than a few billion dollars at best given that they've settled for $250 mln with a firm whose blowout preventer allegedly failed to work.

[AtW]

BP were awarded the drilling rights, therefore it's their gig.

How they get the stuff out of the ground is probably up to them.

Aren't you in any way concerned that BP wasn't doing any drilling, cementing, operating of rig - stuff that's meant to be core competency of the firm?

They've outsourced everything apart from final responsibility for the rig and now they are trying to do just that through the courts.

The companies that do this serious stuff should be fully responsible for it to a degree that if it goes wrong whole company can go bust and everybody loses jobs, instead they've come up with the scheme that on paper allows them to reclaim losses from suppliers.

[Pondlife]

Most oil ventures are joint ones to some degree and there's more to the operation than just getting it out of the ground.

This is as much to do with politics and reputation and the knock on effect on the whole industry as it is to do with clean up money.

Currently in the US because of the media coverage it is viewed as a screw up by British Petroleum (again, their naming) and Haliburton are hiding behind a contract that they claim absolves them from any responsibility caused by their negligence.

Of course BP are culpable in all this as they picked the supplier and were responsible for the E2E process. That doesn't mean Haliburton are off the hook.

As you said, this is going to go on for years as BP sure don't want to be the only bad guy in all this.

[AtW]

Haliburton are hiding behind a contract that they claim absolves them from any responsibility caused by their negligence.

If exposure is capped by contract then BP ain't got much of a claim.

[Dearnla]

If exposure is capped by contract then BP ain't got much of a claim.

That isn't going to stop some highly-paid smartass lawyer from convincing BP's management that it's worth a go, especially given the sums involved.

"Billable Hours" is their mantra, after all.....

[AtW]

That isn't going to stop some highly-paid smartass lawyer from convincing BP's management that it's worth a go, especially given the sums involved.

Certainly not and both BP and Haliburton know they'll settle for a few billion in a few years.

What I find really sad is that BP did not actually do fook all itself there - all 3rd party suppliers with a BP badge on the rig.

[Pondlife]

Just for fun, here's a copy of the contract.

mmm billable hours

CUK armchair lawyers to the rescue!

[AtW]

Just for fun, here's a copy of the contract.

mmm billable hours

CUK armchair lawyers to the rescue!

"Contract for Gulf of Mexico Strategic Performance Unit Offshore Well services between BP Exploration and Production Inc and Halliburton Energy Services"



How exactly was BP "exploring" and "producing" on a rig that was fully managed by 3rd party suppliers? That what really makes it mockery of situation.