BP’s behaviour was shameful. But it wasn’t the only one to blame for the gulf disaster


The financial consequences for BP after the Deepwater Horizon spill will rightly be heavy. But as the investigation progresses, other parties’ culpability is coming to light.

With a perennially quizzical frown and soft Mississippi drawl, BP’s new boss, Bob Dudley, has a manner more akin to a baffled mathematician than a corporate battler. But he’s changed the mood music at Britain’s biggest company, which is growing confident of escaping a costly finding of “gross negligence” over its disastrous gulf oil spill.

Six months have passed since the Deepwater Horizon oil rig exploded 50 miles off the coast of Louisiana, killing 11 people and causing an underwater gush of oil that tarnished beaches, wildlife and livelihoods along hundreds of miles of American shoreline. The White House wasted no time in naming BP as the “responsible party” and the more excitable of Wall Street’s analysts sounded dire warnings that the company was destined for bankruptcy, or at least permanent banishment from business in the US.

Dudley, who spent childhood summers swimming and fishing in the gulf, replaced browbeaten Tony Hayward in the top job at BP at the beginning of October. Already he’s complained of a “great rush to judgment” over blame for the disaster. Addressing BP petrol station bosses in the US this week, he declared: “I did not become CEO of BP in order to walk away from my home country. BP will not be quitting America.”

Crucially, a report prepared for the presidential commission investigating the spill this week found that BP’s contractor, Halliburton, botched the cementing job on the Macondo well. And federal authorities have salvaged the well’s blowout preventer from the bottom of the ocean to examine why it failed as a last-ditch tool to cap the leak. It has become obvious that BP shamefully failed to oversee its dangerous deepwater drilling operation adequately – but also that it was badly let down by contractors carrying out crucial work, including Halliburton and rig operator Transocean, whose staff had switched off fire alarms on the ill-fated rig because of false alarms in the night.

Dudley will face the City on Tuesday with BP’s quarterly results and will rattle through the latest numbers on the massive clean-up and compensation effort. Analysts at Barclays Capital believe that the company’s $35bn (£22bn) provision to tackle the disaster may have to rise by $2bn to $3bn because of the time it eventually took to plug the well.

The environmental blight has, quite justifiably, hurt BP’s finances badly. The company is offloading $30bn of assets to pay for the fiasco and it has suspended dividend payouts. But its future isn’t in doubt – and the more hysterical of scientific predictions have proven nonsense. Back in June, the US National Centre for Atmospheric Research released simulations of the Deepwater Horizon slick trickling around Florida and into the Atlantic, hitting the beaches of Bermuda and even, conceivably, reaching Europe. The centre’s scientists ought to scrap their simulation software.

Still, this saga isn’t over. More than 11,000 people continue to work on gulf clean-up operations. An official update last week revealed 93 miles of shoreline are still suffering “moderate to heavy” oil pollution and 7% of the gulf’s fishing area remains shut.

For the most part, fishermen are back to hunting redfish, trout and black drum. But, as the magazine Atlantic reported this week, thousands of livelihoods remain tarnished because it’s tough to convince diners that local crustaceans are palatable, despite the shops festooned with signs insisting “it’s safe to eat our gulf coast seafood”.

We won’t know precisely how harshly BP will be judged until two federal investigations conclude early next year. The outcome matters enormously both in reputational and financial terms – a “gross negligence” finding would mean a $4,300 fine per barrel of oil spilt, rather than $1,100 for mere negligence. That could cost BP as much as $21bn, rather than $5.5bn.

BP emerges from this fiasco humbled and humiliated. Dudley is anxious to get back to selling oil. But BP won’t be allowed to move on until we know precisely how shamefully the company let us all down

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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