Time to Drill Down Into Halliburton's Role in Big Oil Spill

Under pressure from Congress and an inquiring media, Halliburton began a controlled leak of information about its role in the big gulf oil spill today, but things could get quite explosive if they appear to be hiding something.

The WSJ (Russell Gold and Ben Castleman) reported earlier today that Halliburton "didn't respond" to questions about its role in the spill. That's odd, given that, as the Journal reported, an independent expert noted that "the initial likely cause of gas coming to the surface had something to do with the cement," and the fact that Halliburton "was handling the cementing process on the rig."

Picking up on the report, Congressman Henry Waxman sent a letter to Halliburton asking the company to start talking and handing over any relevant documentation.

Perhaps knowing that it couldn't hold out much longer, the firm issued a terse statement this afternoon about the "cementing facts regarding rig incident" , which was hardly illuminating.

The gist:
  • Halliburton performed a variety of services on the rig, including cementing.
  • Halliburton had four employees stationed on the rig at the time of the accident. All four were rescued by the Coast Guard.
  • Halliburton completed the cementing of the final production casing string 20 hours prior to the incident.
  • The company also claims it tested the production casing string."
  • It also stated that "at the time of the incident, well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well, consistent with normal oilfield practice."

Clearly there is going to have to be some careful examination of the cementing operation and related engineering questions. As Gold and Casselman report, the MMS says "cementing was a factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period....the single largest factor, ahead of equipment failure and pipe failure."

Moreover, cracks in the integrity of the company's cementing operations have happened before. The Journal reporters say Halliburton was the cementer on a well that suffered a big blowout last August in the Timor Sea, off Australia, where tens of thousands of barrels of oil were released over 10 weeks before it was shut down.

The investigation into that incident "is continuing; Halliburton declined to comment on it."

It's starting to look like the only thing Halliburton can cap tightly is its own mouth.

If they don't start spilling their guts soon, what is already destined to be an ecological disaster will also be a major PR disaster for a company already saddled with the reputation for being a war profiteer.