Feds: Halliburton Had Prior Knowledge of Unstable BP Well Cement

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BP oil spillA federal commission investigating the BP (BP) Deepwater Horizon oil spill disaster, issued a scathing report today, saying BP and its cement contractor Halliburton (HAL) knew that test results for the cement to be used as a plug for the bottom of the oil well showed the cement was unstable, according to a letter that lead investigator Fred Barlit has given to the commission, The New York Times reported.

According to the letter, Halliburton conducted four tests on the cement slurry, two in February and two in April. One of the February reports was provided to BP in March, but there was no indication that Halliburton flagged the foam stability data and no indication BP raised questions about the results. The second February test also produced results that showed the cement slurry would be unstable.

In the letter, Barlit notes:
We have known for some time that the cement used to secure the production casing and isolate the hydrocarbon zone at the bottom of the Macondo well must have failed in some manner. That cement should have prevented hydrocarbons from entering the well. For a variety of technical reasons that we will explain at the upcoming hearing, BP cemented the well with a nitrogen foam cement recommended and supplied by Halliburton. Halliburton generated the nitrogen foam cement by injecting high pressure nitrogen into a base cement slurry as it pumped that slurry into the well.
That Macondo well exploded on April 20, killing 11 workers, spewing 4.9 million barrels of oil into the Gulf of Mexico, creating widespread damage to the ecosystem along the Gulf Coast and creating billions of dollars of economic damage to the region's fishing, shellfish and tourism industries.

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One April test was performed seven days before the BP Deepwater Horizon blowout and again yielded unstable results, according to the commission. Barlit noted that the results of this failed test were reported internally within Halliburton by at least April 17, but it's not clear whether they were shared with BP.

Halliburton then conducted a fourth test that finally yielded results that the foam slurry looked stable, but Barlit isn't certain whether the test was conducted before or after the cement mixture was poured down the well. In his most stinging note, he points out: "Halliburton may not have had -- and BP did not have -- the results of that [successful] test before the evening of April 19, meaning that the cement job may have been pumped without any lab results indicating that the foam cement slurry would be stable."

Shares of Halliburton plummeted as much as 16.2% in intraday trading to $28.86, before closing down around 7.5%. In an email, Cathy Mann, spokeswoman for Halliburton said: "We continue to review today's report from the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling and will publish a response later today."
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