Reports stemming from the presidential commission investigating the Gulf of Mexico oil spill indicate that Halliburton and BP were aware of flaws in the cement used to seal the well’s bottom. Halliburton’s CDS spreads started to move Thursday – what will happen on Friday?
“The distribution of the burden, unlike hardened cement, is still fluid.”
Halliburton and BP may have been aware of flaws in the cement used to seal the well’s bottom, according to an official report. CDS on Halliburton started out moderately wider on the headlines, but is currently about 38 bps wider than yesterday’s close. Anadarko and Transocean are essentially unchanged. But this can change quickly.
The market’s reaction on BP CDS will come in Friday’s London session
“Whether the report constitutes a ‘smoking gun’ or not remains to be seen, but it has that potential. Litigation risk is high even if the total amount is uncertain. The distribution of the burden, unlike hardened cement, is still fluid,” vice president Otis Casey at Markit writes in a comment.
Back in May, it was the Transocean CDS that got the biggest kick.
- Feds: Halliburton Had Prior Knowlege of Unstable BP Well Cement (dailyfinance.com)
- Halliburton and BP Knew of Cement Flaws (green.blogs.nytimes.com)
- Halliburton cement job played role in BP Macondo blowout: panel (reuters.com)
- Halliburton cement found unstable in BP well (marketwatch.com)