BP (NYSE:BP) is asking contractor Halliburton (NYSE:HAL) to cover all the costs resulting from the U.S. Gulf of Mexico spill in its latest court filing.  The British oil major is seeking ‘the amount of costs and expenses incurred by BP to clean up and remediate the oil spill, the lost profits from and/or diminution in value of the Macondo prospect, and all other costs and damages incurred by BP related to the Deepwater Horizon incident and resulting oil spill’. According to BP, it has spend around $21 billion in cleanup costs and damages related to spill and has allocated a total of more than $40 billion to cover costs arising form the incident. To date, BP has managed to settle disputes with its equity partners and the provider of the blowout preventer for the well. However, settlements with two of its principal contractors, Halliburton and Transocean (NYSE:RIG), have remained elusive.
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BP adds legal pressure
BP has been pushing Halliburton, which provided the cement for the Macondo well, to accept its share of the blame but the oilfield services firm has refused to reach a settlement. Halliburton claims that BP was fully responsible for poor managerial choices that led to the disaster. Halliburton has also said that its cementing contract required BP to indemnify it even if its own employees are found to share a part of the blame.  BP, however, has accused Halliburton of gross negligence in order to cancel any obligations related to the indemnity clauses.
The legal battle has grown intense over the past few weeks, with BP accusing Halliburton of destroying sample evidence a few weeks ago. (See: Halliburton Stock Slides as it Defends Itself Against BP Allegations) Halliburton has disputed this claim and filed countersuits against BP. This high-stakes legal battle is being keenly watched by industry players as it could greatly affect the fortunes of both companies. The two companies, along with rig operator Transocean, will be facing over 500 lawsuits from private businesses, individuals and governments in trials that will begin in February. The damages are expected to run into billions of dollars.Notes: