According to a report by the presidential Oil Spill Commission, BP and Halliburton were aware that the cement being used in the Gulf of Mexico drilling site didn't pass stability tests. The report reveals [PDF] that "Halliburton had conducted three laboratory tests that indicated that the cement mixture did not meet industry standards," and that "the result of at least one of those tests was given on March 8 to BP, which failed to act upon it." The blowout at the Gulf site killed 11 workers and led to a historic oil spill whose effects are still very much being felt. Analysts are measuring the impact of the news on the two embattled companies.
How Important Was the Cement? The Times reports that "although [lead OSC investigator Fred] Bartlit does not specifically identify the cement failure as the sole or even primary cause of the blowout, he makes clear in his letter that if the cement had done its job and kept the highly pressured oil and gas out of the well bore, there would not have been an accident."The Times adds that "the commission obtained from Halliburton samples of the same cement recipe used on the failed well... The cement slurry was sent to a laboratory owned by Chevron for independent testing. The mixture failed nine separate stability tests designed to reproduce conditions at the BP well and did not pass any."
Companies Share Blame Time's Bryan Walsh notes that "if Halliburton really failed to highlight the problems with the cement test to BP, and simply buried the data in a vast technical report, that would seem to shift more of the blame to Halliburton—although at the end of the day, it is still BP's well. And as Bartlit notes at the end of his letter, since there's always a risk that cement jobs can be faulty, there are tests that can be done to doublecheck the quality—and BP and Transocean, the company actually operating the Deepwater Horizon, did not seem to perform these tests."
Financial Fallout for Halliburton CNN reports that "shares of Halliburton plunged" following the release of the OSC report. "Halliburton's stock dropped $2.74, or 7.9%, to end the day at $31.68 a share," CNN staffer Ben Rooney writes. "Earlier in the day, the stock was down more than 10%." Bloomberg reports that it's the company's biggest stock loss in five months.
Halliburton = Zelig New York Magazine's Daily Intel blog wonders, "Where's the Forrest Gump–like movie that shows how little old Halliburton was secretly at the heart of every major disaster of the past decade?"