Friday, October 29, 2010

Halliburton (NYSE:HAL) Under Fire Over BP (NYSE:BP) Cementing Job

In what could be extraordinarly costly to Halliburton (NYSE:HAL), findings by the oil spill commission point to the cement mixture used to seal the BP (NYSE:BP) oil well was faulty.

The findings contradict prior statements made by Halliburton which asserted the well design of BP was at fault in the crisis.

Investigators said the tests performed by Halliburton, and their results, should have raised flags as to its viability.

Halliburton has claimed their tests results revealed the cement mix was stable for use.

According to the panel, of the four tests performed in February and April, only one of them has results which had the mix holding up. Even worse, the results may not have been shared with BP, or possibly even Halliburton before the cement had been pumped into the well, according to chief investigative counsel Fred H. Bartlit Jr.

When the well exploded, BP had a single result of the four tests available to them.

"Halliburton should have considered redesigning the foam slurry before pumping it at the Macondo well," Bartlit concluded.

Internal tests by BP and an independent test conducted by Chevron (NYSE:CVX) on behalf of the commission reached the same conclusions, that the cement pumped into the well was flawed.

It appears BP hadn't received reports on the tests until after the accident.

This could be devastating to Halliburton depending on the consequences of the determination.

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