Florida real estate developer St. Joe Co. is suing Halliburton Co. over its role in the rig explosion that led to the massive oil spill in the Gulf of Mexico.
St. Joe states that Halliburton, which was responsible for encasing BP PLC’s subsea well in cement, ignored safety procedures and didn’t properly manage the cementing process. In deepwater drilling, cementing is a critical element in preventing oil and gas from escaping from the well.
“As a result, the cementing failed, allowing oil and gas to escape the well which caused the catastrophic blowout,” St. Joe said. The cause of the blowout has not yet determined. Multiple investigations are ongoing.
St. Joe owns about 577,000 acres in Florida, 70 percent of which are within 15 miles of the coast. Since the rig explosion in April, St. Joe says the value of its properties has declined substantially. Its stock has lost 23 percent since the April 20 incident; at one point it had dropped 40 percent. At its worst point, the company lost about $1.4 billion in market capitalization.
BP PLC — the well’s operator — made most decisions on the rig. Documents released by the House Energy and Commerce Committee in June show that BP apparently rejected advice of Halliburton in preparing for the cementing job to close up the well. BP rejected Halliburton’s recommendation to use 21 “centralizers” to make sure the casing ran down the center of the well bore. Instead, BP opted to use six centralizers.
Source: http://www.insurancejournal.com/