Tuesday, May 04, 2010
"A Well-Timed and Profitable Accident"
How did the Gulf oil rig explode? A prominent theory adds Halliburton to the mix. Workers had just finished cementing the well when the rig blew, leading experts to speculate that a flaw in this process could have caused the explosion. Halliburton, the largest company in the global cementing business, was in charge of cementing the well.
In order to prevent oil and natural leakage, rig workers pump cement down wells after they've finished drilling. This process requires a very particular type of cement, one that must be mixed and stirred in a precise fashion. If the cement is flawed, it can crack or fail to set properly, allowing oil and gas to leak through. If gas escaped through the Gulf rig's cement, it could have shot back up the well -- what's known as a "blowout" -- and ignited the fatal blast.
Halliburton was also responsible for cementing a well off the coast of Australia that blew last August, leaking oil for ten weeks before it was plugged. Though the investigation continues, an official from the U.S. Minerals Management Service testified that a poor cement job probably caused the explosion.
Gulf oil well disaster could mean explosive profits for Halliburton
The oil well explosion in the Gulf of Mexico could be a well-timed and profitable accident for Halliburton, the global oil company with the famous connection to former U.S. Vice President Dick Cheney. Just eight days before the uber-Valdez accident, Houston-based Halliburton acquired Boots & Coots Services, also based in Houston, in a $240 million cash and stock deal.
Boots & Coots, which uses the graphic of a burning oil well to represent the ampersand in its name, specializes in "pressure control and well intervention services." In other words, when an oil well explodes, Boots & Coots can step in and help remedy the problem. In a release, Jerry Winchester, Boots & Coots president and CEO, says "Combining the resources of both companies creates the premier intervention company across the globe.”
While Halliburton's timing of the acquisition could be chalked up to luck, some members of Congress are asking questions. Reps. Henry A. Waxman (D-Beverly Hills) and Bart Stupak (D-Mich.), have asked Halliburton provide all documents relating to "the possibility or risk of an explosion or blowout" at the rig in the Gulf, according to a report in the LA Times.