BP Gain ‘Premature’ as Panel Co-Head Cites Errors
BP Plc’s gain in trading early today was premature because the operator made most of the mistakes that doomed its Macondo well in the Gulf of Mexico, said William Reilly, co-chairman of a U.S. panel investigating the disaster.
“The market reaction was premature,” Reilly said today in a Bloomberg Television interview. “The centrally responsible company in the Macondo blowout was the operator, BP. There are other companies who are implicated. We are very clear about that. Most of the bad decisions, however, were made by BP or with BP’s approval and acceptance.”
BP fell 0.5 percent to 496.9 pence in London trading after increasing as much as 2.5 percent to 511.5 pence, the highest intraday price since May 28. BP’s American depositary receipts, each representing six ordinary shares, fell 27 cents to $46.23. BP’s contractors and regulators were partly to blame for the blast, the National Commission on the BP Deepwater Horizon Oil Spill said in a report yesterday.
Halliburton Co., based in Houston, which provided cement to plug the well, and Vernier, Switzerland-based Transocean Ltd., owner of the Deepwater Horizon rig leased by BP, made fewer mistakes than London-based BP, Reilly said today.
“BP was irresponsible and, I think to a significant degree, incompetent with respect to several major decisions that were made on the rig,” Reilly said today.
The report excerpt released yesterday supports BP’s conclusions that the catastrophe was a result of “multiple causes, involving multiple companies,” Scott Dean, a spokesman for the London-based oil company, said in an e-mail.
BP Crafted, Directed
Procedures in the final hours before the blowout “were crafted and directed by BP engineers and approved in advance by federal regulators,” Lou Colasuonno, a spokesman for Transocean, said in an e-mail.
The commission “selectively omitted information we provided to them in response to their numerous inquiries,” Teresa Wong, a Halliburton spokeswoman, said in an e-mail. “Halliburton acted at the direction of BP.”
Faulting BP’s contractors and the administration make it less likely the company will be found grossly negligent, reducing the scale of fines and court awards, analysts said. The report signals BP is “most unlikely” to be solely responsible, said ING Wholesale Banking analyst Jason Kenney, who is based in Edinburgh.
Fishing grounds covering thousands of square miles were closed and deep-water exploratory drilling was halted by the U.S. after the well blew out about 40 miles off the Louisiana coast on April 20.
The commission will publish its report on the reasons for the disaster and recommendations for the energy industry and regulators on Jan. 11.
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