Fla. developer sues Halliburton, saying company’ oversights on rig contributed to Gulf spill
By APThursday, August 5, 2010
Fla. developer sues Halliburton over Gulf spill
NEW YORK — 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 said late Wednesday 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.
The developer, based in Watersound, Fla., 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.
Halliburton wasn’t immediately available to comment. It has said previously that it followed accepted industry practice in cementing the well.
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.
St. Joe filed the suit late Wednesday in Delaware Superior Court.
Early Thursday, St. Joe posted a second-quarter loss of $8.6 million, or 9 cents per share, compared with a loss of $44.8 million, or 49 cents per share, a year earlier.
Revenue fell to $22 million from $39.1 million a year ago, due to a steep decline in property sales.
