In Spite of Oil Spill, Wall Street Still Likes Halliburton
That's because the company was responsible for an oil drilling process known as "cementing," which regulators had already identified as a frequent cause of well blowouts. The company says it's premature to speculate on the cause of the disaster, but it has confirmed a few things: It had four employees stationed on the rig at the time of the accident; cementing was one of several services the company performed on the rig; it completed the cementing of a casing string roughly 20 hours before the accident; and the cement slurry design had been used in other similar applications without problems.
This isn't the first time Halliburton has been in the spotlight, of course. The company, which former Vice President Dick Cheney previously chaired, several years ago took heat for winning no-bid government contracts for its work in Iraq and for moving to Dubai.
Wall Street Supports Halliburton
Wall Street has been quick to defend Halliburton, at least based on the limited information available so far. The stock traded up 74 cents, or 2.4%, to $31.39 on Monday as analysts expressed confidence that the company was not to blame.
"We believe a confluence of events outside the control of either Halliburton or Transocean may have contributed to the blowout," said Robert MacKenzie, an FBR Capital Markets analyst, in a report. "Given this analyst's former experience as a cementing engineer and the evidence available today, we can find no fault so far with anything Halliburton may have done and are thus more confident that the stock should gradually recover as investors gain a similar confidence."
It might help that BP (BP) CEO Tony Hayward, who last week told Reuters that his company was taking "full responsibility for the spill," now seems to be shifting responsibility for the accident to drilling contractor Transocean.
On Monday, Hayward told ABC's "Good Morning America" that his company was not responsible for the accident, instead blaming failed equipment belonging to Transocean. Hayward did say, however, that BP would still pay for the costs associated with the cleanup. Meanwhile, a Transocean spokesman told the Associated Press that the company will "await all the facts before drawing conclusions."
MacKenzie isn't as bullish on Transocean as he is on Halliburton. "We believe less clarity is available surrounding the operation of the rig and thus believe that Transocean may be faced with a larger overhang of investor worry," he wrote in his report.